Naira Depreciates as Nigeria’s Reserves Surge to $48.5 Billion
- Nigeria's currency weakened again at the influencingofficial window despite rising external reserves to $48.5 billion
- Naira's decline reflected high demand for foreign currency amidst inadequate supply and reduced central bank intervention
- Global oil price fluctuations added uncertainty to Nigeria's economic outlook, influencing foreign exchange market dynamics
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s currency weakened again at the official foreign exchange window, even as the country’s external reserves climbed to their highest level in years.
The Central Bank of Nigeria (CBN) data showed that the naira depreciated by 0.24 per cent at the Nigerian Foreign Exchange Market (NFEM), closing at ₦1,341.35 per dollar.
Source: Getty Images
The decline marked the second straight day of losses at the official window, reflecting mounting demand for foreign currency among eligible market participants.
Rising demand outpaces dollar supply
At the Nigerian Foreign Exchange Market, the spot rate settled around ₦1,341 per dollar as requests for foreign payments outpaced available dollar supply.
According to a report by MarketForce Africa, market watchers attributed the pressure largely to increased offshore obligations and corporate demand, combined with the absence of strong FX intervention from the apex bank.
Analysts said the imbalance between demand and supply at the official segment remains a key factor driving the currency’s slide.
The CBN data showed that while dollar inflows into the system have improved, they have not been sufficient to cover growing foreign payment requests in recent sessions.
The reduced presence of direct intervention by monetary authorities has further exposed the market to demand pressures.
Without sizeable injections to stabilise liquidity, the naira has been left to adjust more freely in response to underlying market forces.
Interestingly, conditions differed at the parallel market, where the local currency appreciated by 1.86 per cent to ₦1,336 per dollar.
The divergence between the official and informal segments highlights the complex dynamics shaping Nigeria’s foreign exchange landscape, with liquidity patterns varying across markets.
External reserves hit $48.5 billion
Despite the weaker currency, Nigeria’s gross external reserves surged past $48 billion, reaching $48.5 billion, according to fresh figures from the Central Bank.
The level represents the highest reserve position in about eight years.
The stronger reserve buffer has been supported by improved foreign inflows, including oil earnings and other external receipts.
Economists believe the rising stockpile enhances the country’s capacity to defend the naira, meet external obligations, and stabilise investor confidence.
Some analysts project further gains in reserves in the coming months, driven by expectations of stronger oil receipts and a possible moderation in petroleum import payments.
Oil prices add global uncertainty
Developments in the global oil market are also influencing Nigeria’s outlook. Crude prices recently climbed amid renewed geopolitical tension surrounding negotiations over Iran’s nuclear programme.
Although talks between the United States and Iran are expected to continue, the lack of tangible progress has fueled concerns about potential supply disruptions.
Brent crude settled around $69 per barrel, while West Texas Intermediate hovered near $65 per barrel.
Higher oil prices generally bode well for Nigeria’s revenue and reserve accumulation, given the country’s dependence on crude exports.
Source: Getty Images
Still, the current episode underscores a critical reality: stronger reserves alone may not immediately translate into a firmer currency.
As long as foreign exchange demand continues to outweigh supply at the official window, the naira could remain under pressure, even in the face of historically robust external buffers.
Naira rallies to N1,390 in parallel market
Legit.ng earlier reported that the naira recorded a strong rebound in the parallel market on Monday, February 16, 2026, appreciating to N1,390 per dollar and further closing the gap with the official foreign exchange window.
The latest movement represented a 2.16 per cent gain compared to the N1,420 quoted last Friday, February 13.
Street traders confirmed that the local currency gained N30 within one trading session, reflecting renewed confidence and improved dollar liquidity in the informal market.
Proofreading by Funmilayo Aremu, copy editor at Legit.ng.
Source: Legit.ng
