CBN’s Dollar Exchange Rate Changes as Naira Reverses Gains, Ends October Badly
- The naira weakened to about N1,346 per dollar in October, giving back roughly 42% of its three-month rally gains
- Nigeria’s foreign reserves rose to about $46 billion, but stronger reserves did not prevent renewed pressure on the naira
- The World Bank raised Nigeria’s 2026 growth forecast to 4.3%, while exchange-rate volatility remains a concern for businesses and consumers
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira ended October 2026 on a disappointing note, surrendering about 42% of the gains it recorded during a three-month rally as renewed pressure pushed the dollar exchange rate higher.
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the local currency weakened to approximately N1,346 per dollar on October 30, compared with N1,329.50 at the end of September.
Source: Getty Images
The development represents a depreciation of N16.50 and marks a setback for the currency, which had strengthened considerably between July and September.
However, despite the October decline, the naira remained stronger than its July opening level of N1,369 per dollar.
Naira reverses gains against US dollar
According to NFEM data, the naira appreciated by N39.50 between July 1 and September 30, representing a gain of approximately 2.88% when measured against its July exchange rate.
The currency's performance had raised expectations of greater stability in Nigeria's foreign exchange market.
However, October brought renewed volatility, with the naira losing N16.50 of those gains.
The exchange rate moved from approximately N1,332 per dollar on October 2 to N1,346 on October 30, representing a depreciation of about 1.05%.
The figures suggest that the currency struggled to sustain its earlier momentum despite improvements in Nigeria's external reserves.
CBN exchange rate records sharp fluctuations
The naira experienced considerable fluctuations throughout October, reflecting changing conditions in the official foreign exchange market.
On October 12, the currency traded at N1,332.99 per dollar before weakening to N1,335.50 the following day.
It subsequently recovered to N1,329.50 on October 19 but slipped to N1,334.99 on October 20.
The sharpest pressure emerged later in the month when the exchange rate weakened to N1,370 per dollar on October 23.
Although the currency recovered to N1,365 on October 26, it remained under pressure before strengthening towards the month's close.
By October 30, the official exchange rate had improved to approximately N1,346 per dollar, showing that the naira's monthly decline was not continuous.
Nigeria's foreign reserves rise significantly
Interestingly, the naira's depreciation occurred despite reported improvements in Nigeria's foreign exchange reserves.
Previously published figures indicated that Nigeria's reserves climbed to approximately $46 billion in October, compared with $34.80 billion at the end of 2025.
The increase represents a substantial improvement in the country's external financial position.
Higher reserves generally strengthen the Central Bank of Nigeria's capacity to meet foreign obligations and support confidence in the currency.
However, stronger reserves do not automatically guarantee exchange-rate stability, particularly when demand for foreign currency fluctuates.
Source: Getty Images
World Bank projects stronger Nigerian economy
Meanwhile, the World Bank has raised Nigeria's economic growth forecast for 2026 to 4.3%, compared with an estimated 4.0% in 2025.
The international financial institution also expects the economy to expand by 4.4% in both 2027 and 2028.
The improved outlook suggests stronger economic activity, although sustained growth will not necessarily eliminate exchange-rate volatility, Nairametrics reported.
For Nigerian businesses, importers and consumers, the naira's performance remains particularly important because currency movements can influence the cost of imported goods, production inputs and international transactions.
As November begins, attention will turn to whether the naira can recover its October losses or face renewed pressure in the official market.
Naira weakens in the official window
Legit.ng earlier reported the naira’s performance against the dollar, pound and euro, alongside rising foreign exchange turnover and Nigeria’s growing reserves.
The naira weakened in the official market even as FX turnover jumped by 350% to $326.12 million, while the currency gained N5 in the parallel market. What drove the sharp rise in trading activity?
Source: Legit.ng
