Naira Gains Despite CBN Rate Cut As Reserves Climb to $54.7bn
- The naira strengthened against the dollar in the parallel market on Wednesday, with traders quoting the greenback at N1,385
- The CBN's Monetary Policy Committee cut the Monetary Policy Rate to 23%, a reduction of 350 basis points, after a two-day meeting in Abuja
- Analysts warned the sharp rate cut could weaken the appeal of naira assets and trigger fresh pressure on the foreign exchange market
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The naira edged higher in Nigeria's parallel market on Wednesday, with traders buying the dollar at N1,385 compared with N1,390 previously, a N5 gain recorded even as the Central Bank of Nigeria (CBN) slashed its benchmark interest rate by 350 basis points.
The improvement narrowed the gap between the black market and official rates to N58, or 4.37%, down from N61, or 4.59%, recorded on Monday.
Source: Getty Images
Official market and liquidity
In the official Nigerian Foreign Exchange Market (NFEM), the naira gained N2.02 to close at N1,327.78 on Tuesday, a 0.15% improvement from N1,329.80 on Monday, according to CBN data.
Liquidity improved sharply, with total turnover at the NFEM window rising by 107.02% to $694.58 million on Tuesday from $335.51 million on Monday.
BusinessDay reports that Nigeria's external reserves reached $54.79 billion as of September 21, 2026, a 30.36% rise compared with $42.03 billion recorded on the same date in 2025.
CBN Governor Olayemi Cardoso said gross reserves stood at $55.25 billion as of September 18, 2026, the highest level in 18 years and enough to cover about 11.3 months of import costs.
Analyst outlook: risk and stability
Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise (CPPE), said the divergence between Nigeria's easing stance and tightening by major global central banks could widen interest-rate gaps and reduce the appeal of naira-denominated assets.
Source: Getty Images
He warned this raised the risk of portfolio outflows and fresh pressure on the exchange rate.
The CPPE, however, noted that Nigeria was entering this period of monetary easing with stronger external buffers than in past cycles.
Investment firm AIICO Capital offered a steadier view. Its analysts said:
"Expect the naira to hold near N1,330 at the official window. The rate cut narrows the return on naira assets, but reserves of about $55 billion, up a fifth since January, give the central bank room to smooth any outflows."
CBN injects $250 million into the FX market
Earlier, Legit.ng reported that the Central Bank of Nigeria (CBN) had supplied $250 million to the foreign exchange market over five consecutive trading sessions.
The intervention was aimed at boosting dollar availability for banks and authorised dealers, particularly as demand for foreign currency increased ahead of the year-end period.
The latest move is part of the CBN’s efforts to improve liquidity in the official FX market and support stability in the naira as the apex bank works towards its 2026 policy objectives.
Source: Legit.ng
