Naira Surges in FX Market as FX Transactions Hit $1.5 Billion in One Day
- Nigeria's foreign exchange market recorded a massive single-day turnover of $1.5bn on Tuesday
- The naira strengthened against the dollar in both the official and parallel markets as liquidity improved sharply across FX segments
- CBN Governor Olayemi Cardoso credited ongoing reforms for pushing Nigeria's net foreign reserves from about $3 billion to over $40 billion
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria's foreign exchange market saw a dramatic surge in activity on Tuesday, with total turnover at the Nigerian Foreign Exchange Market (NFEM) climbing to $1.5 billion, up 87.63 per cent from $816.79 million recorded the previous day.
The spike in trading volume lifted the naira on both the official and parallel markets. Central Bank of Nigeria (CBN) data showed the dollar fell to N1,375.31 at the NFEM on Tuesday, a N4.80 improvement from N1,380.11 on Monday, representing a 0.35 per cent gain.
Source: Getty Images
In the parallel market, the naira firmed to N1,400 per dollar on Wednesday morning, up N12 from N1,412 traded the prior week.
The narrowing of the gap between both rates to 1.8 per cent, down from 2.54 per cent on Monday, signals improving alignment between official and street prices.
Deal volumes also rose sharply. The number of transactions executed at the NFEM increased by 16.79 per cent to 313 on Tuesday, July 21, 2026, from 268 the day before.
In the interbank segment, turnover climbed 21.19 per cent to $322.66 million, while deals jumped 61.76 per cent to 110 from 68, pointing to broader market participation.
Nigeria's reserves hit 17-year high
Underpinning the improved market conditions are Nigeria's external reserves, which reached a 17-year high of $52.02 billion as of July 20, 2026, according to CBN data. That figure is about 36 per cent higher than the same period a year earlier.
CBN Governor Olayemi Cardoso, speaking at the BusinessDay 14th Annual CEO Forum in Lagos during a fireside chat with BusinessDay chief executive Frank Aigbogun, linked the reserve gains to reforms introduced since the current CBN leadership took office.
"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 billion.
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.
CBN targets continued reserve growth
Cardoso said the bank plans to keep building reserves to maintain adequate buffers against external shocks and to sustain investor confidence.
Source: Getty Images
He added that Nigeria's current reserve level provides roughly 10 months of import cover, and that a more transparent FX market has helped lay the groundwork for increased investment and longer-term economic growth.
The shift from a multi-rate exchange system to a more market-driven structure has been central to the CBN's reform agenda, with Tuesday's trading figures offering one of the clearest signs yet of improved liquidity in Nigeria's FX market.
Naira holds firm against dollar
Legit.ng earlier reported that the naira's stability against the dollar amidst global economic pressures, noting that it closed at N1,379.6504 in the official market.
As foreign exchange inflows reached $970 million, this resilience comes at a time when many currencies face significant external risks, keeping analysts cautiously optimistic about the naira's short-term outlook.
Source: Legit.ng
