Single-day $1.5bn FX transaction lifts naira as market turnover surges

The foreign exchange market recorded a single-day transaction turnover of $1.5 billion on Tuesday, boosting the naira against the dollar across both the official and parallel markets as liquidity improved significantly. Data published by the Central Bank of Nigeria (CBN) showed the naira appreciated by N4.80, with the dollar quoted at N1,375.31 on Tuesday, representing a 0.35 percent gain from N1,380.11 recorded on Monday at the Nigerian Foreign Exchange Market (NFEM).

Naira gains across markets, gap narrows

The local currency also strengthened in the parallel market, appreciating by N12 to N1,400 per dollar on Wednesday morning from N1,412 traded last week, a 0.86 percent gain. Consequently, the gap between the official and parallel market exchange rates narrowed to 1.8 percent from 2.54 percent recorded on Monday.

CBN data showed that total turnover at the NFEM surged by 87.63 percent to $1.5 billion on Tuesday, up from $816.79 million on Monday, making it one of the strongest single-day trading sessions in recent months. The number of deals executed at the official market also rose by 16.79 percent to 313 from 268 recorded a day earlier.

Interbank activity jumps as reserves hit 17-year high

Activity also strengthened in the interbank FX segment, where turnover increased by 21.19 percent to $322.66 million on Tuesday from $266.23 million on Monday. The number of interbank deals jumped by 61.76 percent to 110 from 68 over the same period, reflecting improved market participation.

Nigeria’s external reserves, which provide the CBN with the capacity to support the naira and meet external obligations, continued their steady rise, reaching a 17-year high of $52.02 billion as of July 20, 2026. The reserve level is about 36 percent higher than the corresponding period a year earlier, according to CBN data.

CBN governor says net reserves now over $40 billion

The stronger reserve position aligns with comments by Olayemi Cardoso, governor of the CBN, who recently disclosed that Nigeria’s net foreign exchange reserves have increased from about $3 billion when the current CBN leadership assumed office to more than $40 billion, following reforms aimed at restoring confidence in the country’s external sector.

Speaking during a fireside chat with Frank Aigbogun, chief executive officer of BusinessDay at the BusinessDay 14th Annual CEO Forum in Lagos, Cardoso said the reforms had transformed the FX market from one characterised by multiple exchange rates and limited transparency into a more market-driven system, helping restore liquidity, rebuild reserves and improve investor confidence.

“When we started, the net reserves figure was in the region of about $3 billion plus. If you remember, that was a figure published at the time by J.P. Morgan and it created a lot of panic in the system. More recently, our net reserves figure is in the $40 billions. It has been a long and difficult journey, but there has been regime change in the Central Bank of Nigeria, and that regime change is what has brought about these outcomes,” Cardoso said.

The CBN governor added that the Bank intends to continue growing reserves organically to strengthen investor confidence and maintain adequate buffers against external shocks. He noted that Nigeria’s reserves currently provide about 10 months of import cover, saying the stronger reserve position and a more transparent FX market have laid the foundation for increased investment and sustainable economic growth.

What this means for the naira and Nigerian businesses

The surge in FX turnover and narrowing gap between official and parallel rates signal improving confidence in the naira. For Nigerian businesses, especially importers and manufacturers who rely on dollar access, the improved liquidity and transparent pricing could reduce costs and uncertainty. A stronger reserve buffer also gives the CBN more room to defend the currency, which may help stabilise consumer prices in the months ahead.