Market News

The naira on Thursday gained further against the dollar in the official foreign exchange (FX) market after the Central Bank of Nigeria (CBN) eased restrictions on foreign exchange and government securities transactions by banks and opened access to its discount window.

Data published by the CBN showed that the naira appreciated slightly by N2.93, as the dollar was quoted at N1,357.65 on Thursday, compared with N1,360.58 quoted on Wednesday at the Nigerian Foreign Exchange Market (NFEM).

In the parallel market, also known as the black market, the local currency steadied at N1,424 per dollar on Thursday. The gap between the official and parallel market rates widened to 4.94 percent from 4.71 percent the previous day.

The number of deals at the interbank segment of the FX market dropped by 48.42 percent from 190 on Wednesday to 98 deals on Thursday. Total turnover also declined by 53.13 percent to $79.09 million on Thursday from $168.76 million recorded on Wednesday.

Although the NFEM figures for deals and turnover were not available as of the time of reporting, activity increased the previous day, as total turnover at the NFEM rose to $607.47 million on Wednesday, representing a 228.38 percent increase from the $184.99 million recorded on Tuesday. The number of deals at the NFEM also increased by 119.89 percent from 186 on Tuesday to 409 deals on Wednesday.

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 a 17-year high of $52.19 billion as of August 12, 2026.

This represented a 28.39 percent increase compared with the $40.65 billion recorded in the corresponding period of 2025, according to data published on the CBN website.

The CBN has removed restrictions that previously prevented banks from accessing its Standing Lending Facility (SLF), also known as the Discount Window, after participating in foreign exchange transactions and primary auctions of government securities.

The move is part of a review of the framework governing access to the Discount Window, Tenored Repo Operations and participation in Open Market Operations (OMO), as the apex bank seeks to improve money market functioning and strengthen monetary policy implementation.

In a circular signed by Okey Umeano, acting director, Financial Markets Department, the CBN said restrictions on access to the Discount Window arising from participation in the Nigerian Foreign Exchange Market (NFEM) had been removed.

The Bank also removed restrictions arising from participation in primary auctions of government securities.

The changes mean that banks can now participate in the FX market and buy government securities at primary auctions without such activities restricting their access to the CBN’s Standing Lending Facility.

Analysts at Quest Merchant Bank Limited said the reforms should improve market liquidity, strengthen monetary policy transmission and deepen participation in the fixed-income market.

“The measures are likely to deepen activity across the money market and fixed-income markets while signalling growing confidence in FX market stability, reserve adequacy and overall market conditions,” the analysts said.