The naira weakened by N11.10 against the US dollar in the interbank foreign exchange market on Wednesday, September 9, 2026, closing at N1,334/$ compared with N1,322.90/$ recorded on Tuesday.

The latest exchange rate data, analysed from figures published on the Central Bank of Nigeria (CBN) website, showed a 0.84 per cent depreciation of the naira.

The decline reversed some of the currency’s recent gains in the Nigerian Foreign Exchange Market (NFEM).

Despite the weaker exchange rate, interbank foreign exchange turnover increased significantly during the session, rising to $94.43 million from $55.60 million recorded on Tuesday.

Interbank FX turnover rises 70%

The latest figure represents an increase of $38.82 million, or 69.82 per cent, in interbank foreign exchange transactions.

The market recorded 86 interbank deals on Wednesday, compared with 58 transactions recorded in the previous session.

This represents an increase of 28 deals, or 48.28 per cent.

However, the increase in transaction activity did not translate into a stronger naira, as the currency closed weaker against the dollar.

Naira trades between N1,321.50 and N1,334/$

During Wednesday’s trading session, the naira traded between a high of N1,334/$ and a low of N1,321.50/$.

The weighted average exchange rate stood at N1,329.21/$, while the simple average was N1,329.44/$.

As of the time of filing the report, the CBN had not published Wednesday’s NFEM deals and total turnover, while the reported $94.43 million represented interbank transactions.

On Tuesday, the naira closed at N1,322.90/$ after trading between N1,318/$ and N1,323/$.

The session recorded 248 deals, including 58 interbank transactions, while total NFEM turnover stood at $933.78 million.

Naira remains stronger than August level

Wednesday’s depreciation came after the naira strengthened to N1,322.50/$ on September 4 and N1,320/$ on September 7 before weakening to N1,322.90/$ on September 8.

The currency had generally appreciated since late August, moving from N1,349.99/$ on August 24 to N1,320/$ on September 7.

At N1,334/$, the naira is now N14 weaker than its September 7 closing rate, representing a depreciation of about 1.06 per cent over the two trading sessions.

However, the currency remains stronger than its August 24 level by about N15.99/$, equivalent to an appreciation of roughly 1.18 per cent.

External reserves, oil output support Nigeria’s FX position

Nigeria’s external position has continued to receive support from foreign exchange inflows and improved oil earnings.

Nigeria’s external reserves reportedly crossed the $54 billion mark for the first time since December 2008, reaching $54.08 billion as of September 3, 2026.

Operational data from the Nigerian National Petroleum Company (NNPC) also showed relatively strong crude oil and condensate production during the second quarter.

Production averaged 1.68 million barrels per day in April, 1.73 million barrels per day in May and 1.72 million barrels per day in June, while July production stood at 1.68 million barrels per day.

Global dollar movement adds pressure

Developments in international financial markets could also influence Nigeria’s domestic foreign exchange conditions.

The dollar index was around 98.81 after moving away from a three-week low, while the euro and pound traded at approximately $1.1633 and $1.3547 respectively.

The yen’s recent gains also eased as investors looked ahead to the Bank of Japan’s monetary policy decision.

For Nigeria, developments in global currency markets remain an important factor in assessing domestic foreign exchange conditions.

Nigeria’s FX demand remains elevated

Nigeria’s total foreign exchange utilisation stood at $50.93 billion in 2025, representing the highest annual level since 2019.

Quarterly utilisation stood at $12.71 billion in the first quarter of 2025 and increased to $13.13 billion in the second quarter.

It later moderated to $12.01 billion in the third quarter before rising again to $13.08 billion in the fourth quarter.

The latest movement comes amid continued adjustments in Nigeria’s foreign exchange market, with the naira recording gains and losses as demand, liquidity and global currency conditions influence trading.

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The naira maintained relative stability on Tuesday as improved liquidity in the Nigerian Foreign Exchange Market (NFEM) kept the official rate stronger than prices quoted in the parallel market.

Data from the NFEM showed that the volume-weighted closing rate settled at ₦1,448.03 per US dollar on November 18, 2025—approximately ₦5.60 or 0.39% stronger than the previous day.

Meanwhile, black-market trackers quoted the dollar between ₦1,455 and ₦1,460, keeping the spread at roughly ₦7–₦12 above the official market price. Bureau de change operators say cash demand continues to push retail USD prices above the formal window.

Understanding the Rate Movements

The NFEM—also listed as NAFEM or the I&E window—remains the primary benchmark for institutional, interbank and corporate FX flows. By contrast, the parallel market reflects on-the-spot cash demand and supply conditions.

Analysts attribute the recent stability to better FX inflows, reduced volatility, and improved liquidity following the Central Bank of Nigeria’s interest-rate cut earlier in September. Softer inflation pressures and targeted CBN interventions have also helped ease the sharp swings that dominated trading over the past year.

Impact on Businesses and Consumers

Corporate importers and firms with foreign-currency exposure continue to favour the NFEM window, where rates are more predictable and typically lower.
However, SMEs, travellers, and individuals needing immediate physical dollars still face higher cash prices in the parallel market.

Remittance beneficiaries are also seeing varied outcomes depending on whether funds are received through formal banks or informal currency exchanges.

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The week opened on a positive trajectory, with the local currency briefly rebounding to a four-month high of ₦1,518.88/$, buoyed by improved market sentiment. However, that momentum proved short-lived, as subsequent trading sessions saw the naira ease to ₦1,530.25/$ and later to ₦1,533.11/$ before settling marginally higher at ₦1,532.34/$ on Friday.

According to data from the Nigerian Foreign Exchange Market (NFEM), the naira traded within a band of ₦1,515/$ to ₦1,538/$ over the five-day period. In the parallel market, it fluctuated more widely, ending the week between ₦1,535/$ and ₦1,544/$.

Financial analysts continue to underscore the importance of CBN’s interventions and gradually improving FX liquidity in stabilising the market. In its latest commentary, Cowry Asset Management described the market as exhibiting “mixed signals,” with the naira appreciating marginally by 0.06 per cent week-on-week to close at ₦1,544/$ in the informal market, even as it posted a decline at the official window.

“The divergent trends underscore persistent supply-demand imbalances and an FX liquidity environment that remains in flux,” Cowry noted. However, the firm maintained a cautiously optimistic outlook, citing rising oil revenues and ongoing improvements in Nigeria’s foreign reserves as potential tailwinds for the currency.

A more favourable oil production profile has also bolstered market sentiment. Figures from the Nigerian Upstream Petroleum Regulatory Commission indicate that crude oil output (excluding condensates) rose by 3.6 per cent to an average of 1.51 million barrels per day in June, up from 1.45 million in May. This marked the first time in five months that Nigeria met its OPEC production quota, reflecting enhanced security and operational stability in the Niger Delta.

Meanwhile, AIICO Capital, in its weekly briefing, highlighted that the CBN conducted targeted dollar sales during the week particularly at the start and end of trading sessions to smooth volatility. These efforts coincided with a $422 million boost in external reserves, which climbed to $37.85 billion as of Thursday.

Looking ahead, market participants are bracing for signals from the Monetary Policy Committee (MPC), which convenes this week to deliberate on interest rates and macroeconomic direction. Expectations are split: dovish voices are advocating a rate cut to consolidate gains in inflation moderation and exchange rate stability, while hawkish counterparts caution against premature easing amid global uncertainty and lingering food supply risks.

“The tone of the MPC’s communique will be the clearest signal to market participants,” analysts at Comercio Partners remarked, suggesting that traders are adopting a cautious stance in anticipation of monetary policy cues.

As Nigeria navigates an evolving FX landscape, market dynamics remain closely tied to policy clarity, external earnings, and investor confidence factors that will be decisive in determining the naira’s near-term trajectory.

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