Market News

Data collated from black market operators showed that the local currency traded at N1,400 on Friday morning, marking a N3 loss from the N1,397 it closed at on Thursday. The gap between the official and parallel market rates widened to 4.63 percent on Friday, compared to 4.41 percent on Thursday.

Updated data published by the CBN showed that total turnover at the NFEM window rose by 16.43 percent to $1.06 billion in a single trading day on Thursday, from $913.76 million recorded on Wednesday. However, the number of deals at the NFEM dropped by 11.27 percent, from 479 on Wednesday to 425 deals on Thursday.

The naira on Thursday rose to a five-month high of N1,338.59 in the official foreign exchange (FX) market, supported by sustained dollar liquidity and growing external buffers.

Data published by the CBN showed that the naira appreciated by N5, as the dollar was quoted at N1,338.59 on Thursday, compared to N1,343.59 quoted on Wednesday at the Nigerian Foreign Exchange Market (NFEM).

Nigeria’s external reserves, which give the CBN the firepower to defend the naira and meet external obligations, have maintained a steady growth trajectory, rising to an 18-year high of $53.31 billion as of August 27, 2026. This represented a 29.27 percent increase compared to the $41.24 billion recorded in the corresponding period of 2025.

According to the CBN’s Quarterly Statistical Bulletin, foreign exchange (FX) utilisation across various sectors of the Nigerian economy increased sharply by 74 percent year-on-year to $16.2 billion in Q1 2026.

Analysts at Quest Merchant Bank Limited said while the increase was broad-based, the higher usage was primarily driven by a significant rise in FX utilisation for invisible transactions, which more than doubled to $11.4 billion from $4.5 billion in the previous year. Consequently, invisible imports accounted for the largest share of total FX utilisation, representing about 70 percent of the total.

Within this segment, the financial services sector remained the largest user of foreign exchange, with FX utilisation rising by 117 percent year-on-year to $9.0 billion.

The sector accounted for about 79 percent of total invisible transactions, highlighting its dominant share of FX demand within the segment.

FX utilisation for business services, the second-largest category within invisible transactions, recorded a substantial increase to $1.2 billion from $223.6 million a year earlier.

On the part of visible imports, FX utilisation for merchandise imports (goods) remained broadly stable, rising 0.2 percent year-on-year to $4.9 billion.

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FX utilisation by industrial firms, which are heavily dependent on imported raw materials, machinery and equipment, declined by 20 percent year-on-year to $1.8 billion.

In contrast, FX utilisation for the importation of manufactured and transport products increased significantly, totalling $1.1 billion and $295.0 million, respectively, from $477.9 million and $142.8 million in the previous year.

The increase in FX utilisation for these products partly reflects higher import costs arising from disruptions to global supply chains and elevated prices of critical inputs and raw materials following the US-Iran conflict.

Overall, the rise in sectoral FX utilisation reflects improved FX liquidity in the economy, supported by the stronger position of Nigeria’s gross external reserves.

Sustained FX availability is also evident in the relative stability of the naira, which has enhanced market confidence and encouraged greater FX demand from end-users by improving predictability in the FX market.

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Looking ahead, “we expect stronger FX utilisation across sectors, supported by the CBN’s ongoing reforms and policy measures aimed at sustaining FX supply, deepening market liquidity and preserving confidence in the naira,” analysts at Quest Merchant Bank said.