Naira falls N16.17 in October despite reserves, higher FX turnover

The naira depreciated across foreign exchange market segments in October 2026, losing N16.17 month-on-month even as external reserves rose and market activity increased. Central Bank of Nigeria (CBN) data showed the dollar quoted at N1,346.26 on Friday at the Nigerian Foreign Exchange Market (NFEM), compared with N1,330.09 at the beginning of October 2026. That was a 1.2 percent loss.

On a weekly basis, the local currency weakened by N15.58, or 1.16 percent, from N1,330.68 quoted at NFEM the previous Friday. Day-on-day, the naira appreciated marginally by 65 kobo from N1,346.91 on Thursday.

Parallel market gap stays at N39

In the parallel market, the naira depreciated by N25 month-on-month to N1,385 on Friday. That represented a 1.81 percent loss from N1,360 traded at the beginning of October 2026. On a weekly basis, the naira lost 0.5 percent, weakening from N1,378 quoted the previous Friday. The gap between the official and parallel market rates remained at N39 per dollar.

FX turnover jumps, deals mixed

Market activity improved. Turnover in the interbank segment of the FX market jumped by 77.97 percent to $5.25 billion in October from $2.95 billion recorded in September 2026. The number of deals rose by 4.66 percent to 2,694 in October, compared with 2,574 in the previous month.

Although NFEM figures for deals and turnover were not available for Friday, available data showed total turnover at the window reached $16.64 billion in October, up from $12.98 billion in September. The number of deals, however, declined to 6,468 in October from 6,831 in September 2026.

Nigeria’s external reserves maintained an upward trajectory, rising to $55.24 billion as of October 29, 2026. That was a 28.02 percent increase from $43.15 billion recorded in the corresponding period of 2025, according to CBN data. The reserves provide a stronger buffer against external shocks and support the country’s capacity to meet foreign exchange obligations. Yet the naira’s October performance showed that stronger reserves alone have not prevented renewed depreciation.

World Bank, Oyedele on reforms

The World Bank said Nigeria’s gross external reserves rose above $54 billion in September, supported largely by foreign portfolio inflows. It also linked Nigeria’s sharp decline in inflation between January and December 2025 to tight monetary policy and reduced exchange-rate volatility. Headline inflation fell from 27.6 percent in January 2025 to 15.2 percent in December 2025. The report also said gross federation revenues increased by 69 percent in real terms between 2023 and 2025, largely reflecting exchange-rate reforms, the removal of the petrol subsidy and stronger revenue administration.

Finance Minister Taiwo Oyedele warned that Nigeria risks renewed pressure on the naira and capital flight if the government reverses its economic reforms to restore petrol subsidies. Speaking at a press briefing during the IMF-World Bank Annual Meetings in Bangkok, Thailand, Oyedele defended fuel price discounts offered by the Nigerian National Petroleum Company (NNPC) as a commercial strategy rather than a government-funded subsidy.

He said reversing the reforms could undermine investor confidence, trigger capital outflows and reverse gains made in stabilising the foreign exchange market. “Even Nigerians, the elites, the middle class, the high net worth, will move away from Naira. They will start buying dollars,” he said. “They start moving against Naira. So capital is exiting, Nigerians are moving against the Naira. This is the perfect combination for the storm, for the devastating impact,” he added.

Oyedele rejected suggestions that fuel price discounts offered through NNPC Retail amounted to a return to subsidies, arguing that the arrangement reflected normal commercial practices in which businesses reduce profit margins to attract customers and increase sales. “I do not know which part of the world you live in. It’s called retail marketing,” he said, explaining that businesses routinely offer discounts to boost sales and build customer loyalty. “When they say buy one, get one free, that’s commercial. If they say take 10 percent off, that’s commercial,” he added. He said NNPC Retail could increase sales volumes by offering more competitive prices, potentially recovering some reduced margins through higher sales over time. His comments came as the Federal Government seeks to defend its economic reforms amid persistent pressure over the cost of living and questions about whether the policies will be sustained ahead of the 2027 general elections.