MARKET NEWS

Data collated from parallel market operators showed that the local currency was quoted at N1,380/$1 for buying and N1,385/$1 for selling. This represents a 7.94 percent appreciation compared to the N1,495/$1 quoted on January 14, 2026.

In the official FX market, the naira appreciated by N93.14 in nine months, as the dollar was quoted at N1,326.52 on Friday, representing a 7.02 percent gain compared to the N1,419.66 quoted on January 13, 2026, according to the latest data published by the Central Bank of Nigeria (CBN).

Nigeria’s external buffers, also known as foreign currency reserves, increased by 18.95 percent year-to-date to $54.41 billion as of September 2026, from $45.74 billion recorded on January 12, 2026, according to data published on the CBN website.

Read also: Naira gains as external reserves surpass $54bn mark

A report by Quest Merchant Bank Limited noted that FX liquidity conditions improved in August, as inflows through the Nigerian Autonomous Foreign Exchange Market (NAFEM) window increased by 19 percent month-on-month to $5.2 billion, marking the second consecutive month of growth.

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On a year-on-year basis, total inflows increased by 54 percent. The improvement was broad-based, supported by stronger participation from both domestic and offshore sources.

On the external front, offshore participation improved, with total foreign inflows rising by 29 percent month-on-month to $1.9 billion. Foreign portfolio investment (FPI), which accounted for the bulk of these inflows, increased by 32 percent month-on-month to $1.7 billion, supported by attractive carry trade opportunities amid elevated domestic yields.

Although less pronounced, foreign portfolio investment and inflows from other foreign corporates increased by 5 percent month-on-month and 16 percent month-on-month to $136.5 million and $61.4 million, respectively.

On the domestic front, inflows from local participants remained the dominant source of FX supply, accounting for about 64 percent of total inflows and rising by 14 percent month-on-month to $3.3 billion.

The CBN’s continued market intervention also helped sustain FX liquidity, with total FX sales remaining unchanged at $1.4 billion during the month.

Despite the improvement in external inflows, the CBN’s sustained market presence highlights the persistence of underlying FX demand pressures during the period.

Export proceeds continued to support domestic FX supply, benefiting from the persistent rise in crude oil prices. Consequently, exporter inflows increased by 30 percent month-on-month to $1.2 billion in August, providing a significant boost to overall market liquidity.

Similarly, inflows from local corporates and individuals increased to $704.2 million and $34.3 million, respectively, from $579.5 million and $12.5 million in the previous month.

Against the backdrop of improved FX liquidity conditions, the naira and gross external reserves strengthened during the month, reflecting stronger foreign exchange inflows and improved market confidence.

Looking ahead, Quest Merchant Bank expects sustained FX inflows from both domestic and offshore participants, supported by a combination of factors.

These include elevated domestic yields, rising crude oil prices and the CBN’s ongoing reform measures aimed at enhancing market confidence and deepening liquidity in the FX market.