Naira Strengthens Across Official, Black Markets as FX Reserves Rise and Dollar Weakens
- Nigeria's currency gains against the dollar as economic indicators and external reserves improve investor confidence
- Nigeria's GDP grows by 3.89% in Q1 2026, surpassing last year's growth figure
- External reserves rise to $48.98 billion, bolstering the Central Bank's foreign exchange support
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s currency recorded fresh gains against the United States dollar in both the official and parallel foreign exchange markets as improving economic indicators and stronger external reserves boosted investor confidence.
The latest development comes after Nigeria posted stronger-than-expected economic growth in the first quarter of 2026, while easing tensions in the Middle East triggered a decline in global crude oil prices and weakened demand for the dollar.
Source: Getty Images
Strong GDP growth lifts market sentiment
Fresh data released by the National Bureau of Statistics (NBS) showed that Nigeria’s economy expanded by 3.89 per cent year-on-year in the first quarter of 2026.
The figure represents a notable improvement from the 3.13 per cent growth recorded during the same period in 2025.
The stronger economic performance has fueled optimism among investors and market participants, leading to increased confidence in the naira.
Analysts believe expectations surrounding the Central Bank of Nigeria’s (CBN) upcoming Open Market Operations (OMO) bills auction are also attracting attention from foreign portfolio investors, who are expected to bring additional foreign exchange inflows into the country.
Naira appreciates at the official market
According to the CBN’s latest foreign exchange update, the naira appreciated by 0.04 per cent at the Nigerian Foreign Exchange Market (NFEM) window, closing at ₦1,374.92 per dollar.
Trading at the official market remained relatively stable, with the exchange rate fluctuating between ₦1,373 and ₦1,377 per dollar throughout the session.
Meanwhile, foreign exchange interbank turnover declined to $55.79 million across 71 deals, compared with $62.34 million recorded at the close of trading on Friday.
Market analysts say expectations of improved dollar liquidity and possible OMO bill sales to offshore investors could further strengthen demand for the local currency in the coming days.
The black market rate also improves
The naira also posted gains in the parallel market, commonly known as the black market.
Checks across major trading hubs showed the local currency appreciated by ₦5 to close at ₦1,390 per dollar.
The appreciation reflects broad-based demand for the naira across both official and informal foreign exchange segments.
As a result, the gap between the official and parallel market rates narrowed significantly to ₦15.08 per dollar, compared with ₦18.54 recorded at the end of last week.
External reserves approach $49 billion
Another factor supporting the naira is the steady rise in Nigeria’s external reserves.
Latest data showed the country’s foreign exchange reserves increased to $48.98 billion from $48.89 billion, driven largely by inflows from crude oil exports and other foreign currency earnings.
The improvement in reserves strengthens the CBN’s ability to support the foreign exchange market and provides reassurance to investors about Nigeria’s external position.
Oil prices slide on US-Iran negotiation hopes
According to a report by MarketForces Africa, global crude oil prices came under intense pressure on Monday after reports suggested progress in negotiations between the United States and Iran.
West Texas Intermediate (WTI) crude futures plunged by about 8 per cent, slipping below the $90-per-barrel mark, while Brent crude fell roughly 7 per cent toward $93 per barrel.
The sharp decline was driven by expectations that an agreement between the two countries could ease disruptions to global energy supplies.
Investors are closely monitoring developments surrounding the Strait of Hormuz, a critical shipping route responsible for transporting nearly one-fifth of the world’s oil and liquefied natural gas exports.
Source: Getty Images
Reports indicating that the waterway could fully reopen within weeks have raised hopes of improved global supply conditions, helping to push oil prices lower and ease concerns over prolonged geopolitical disruptions.
For Nigeria, stronger economic growth, rising reserves, and renewed investor confidence are combining to provide fresh support for the naira, offering a positive signal for businesses and consumers watching exchange rate movements closely.
Naira slips by N3.15 against the US dollar
Legit.ng earlier reported that the Nigerian currency, the naira, depreciated slightly against the United States dollar in the official foreign exchange market.
Fresh data from the Central Bank of Nigeria (CBN) showed that the Nigerian Foreign Exchange Market (NFEM) closed at N1,375.46/$1 on Friday, reflecting a N3.15 or 0.23% decline compared with the previous session’s rate of N1,372.31/$1.
The naira also weakened against other major currencies in the official market. Against the British pound sterling, it fell to N1,849.72/£1, representing a loss of N9.46 from N1,840.26/£1 recorded in the previous trading day.
Source: Legit.ng
