Market News

The naira maintained relative stability across foreign exchange (FX) markets on Wednesday as Nigeria’s external reserves rose above $48.5 billion, bolstering liquidity and narrowing the gap between official and parallel market rates.

Bank of Nigeria (CBN) showed the naira closed almost flat at the Nigerian Foreign Exchange Market, depreciating marginally by N2.15, or 0.16 percent to N1,338.11 per dollar, from N1,335.96 quoted on Tuesday. FX market participants reported the dollar trading as low as N1,328 during the session.

At the parallel market, also known as the black market, the local currency strengthened by N10 to close at N1,370 on Wednesday, representing a 0.73 percent gain from N1,380 recorded the previous day.

The improvement has sharply narrowed the spread between the official and parallel market rates to about N32 on Wednesday, compared with N92 recorded last week, reflecting improving price convergence across segments.

Nigeria’s external reserves, which provide the CBN with firepower to support the currency, continued their steady ascent, rising to $48.50 billion as of February 17, 2026, according to figures published by the apex bank.

Fresh data from the National Bureau of Statistics reinforced the improving liquidity backdrop. Its latest capital importation report for the third quarter of 2025 showed total capital inflows surged to $6.01 billion, the highest level in six years. The figure represents a 380.16 percent year-on-year increase and a 17.46 percent quarter-on-quarter rebound following a modest contraction in the second quarter of 2025. The surge was largely driven by renewed investor interest in Nigeria’s fixed income market, according to analysts at Coronation Merchant Bank.

Despite the improved conditions, Bureau De Change operators have yet to resume dollar purchases from commercial banks, one week after the CBN reopened the Nigerian Foreign Exchange Market to them.

In a circular signed by Musa Narkoji, director of the Trade and Exchange Department, the CBN authorised licensed BDCs to purchase foreign exchange from the NFEM through any authorised dealer bank at prevailing market rates. The move is aimed at boosting liquidity in the retail segment and meeting legitimate demand.

Under the guidelines, authorised dealer banks must complete all Know-Your-Customer procedures and due diligence requirements for BDC clients in line with regulatory standards and internal risk frameworks. Upon satisfactory documentation, banks may sell foreign exchange strictly in accordance with extant BDC guidelines, subject to a maximum of $150,000 per week per BDC.

Licensed BDCs are required to submit timely and accurate electronic returns to the Central Bank, while any unutilised foreign exchange purchased from the NFEM must be resold into the market within 24 hours, as operators are prohibited from holding open positions.

Settlement of transactions among BDCs, authorised dealers and end users must be conducted solely through accounts maintained with licensed financial institutions, with third-party transactions strictly barred. In addition, cash settlement must not exceed 25 percent of the total transaction value, reinforcing the CBN’s push to curb cash-based dealings and enhance transparency in the retail FX segment.