According to data from the Central Bank of Nigeria (CBN), the naira closed Tuesday’s trading at ₦1,373.65/$ in the Nigerian Foreign Exchange Market (NAFEM), representing a marginal depreciation of 15 kobo compared with Monday’s closing rate of ₦1,373.50/$.
The official market has remained relatively stable in recent weeks, supported by tighter monetary policy, ongoing foreign exchange reforms, and improved confidence among foreign investors.
Parallel Market Records Broad-Based Gains
In the parallel market, commonly referred to as the black market, the naira appreciated against most major currencies.
The US dollar was quoted at ₦1,385/$, improving by ₦5 from ₦1,390/$ recorded the previous day. The British pound strengthened to ₦1,850/£, compared to ₦1,860/£, while the euro fell to ₦1,630/€ from ₦1,650/€, representing a ₦20 gain for the local currency. The Canadian dollar remained unchanged at ₦1,005/CAD.
The stronger performance in the informal market suggests increased supply of foreign currency and softer demand from importers, travelers, and retail end-users.
Gap Between Official and Parallel Markets Narrows
The difference between the official and parallel market exchange rates narrowed to approximately ₦11.35 per dollar, one of the tightest spreads seen in recent months.
A narrower spread is often interpreted as a sign of improved market efficiency and greater confidence in the formal foreign exchange system, reducing incentives for speculative trading and arbitrage.
While recent stability has boosted confidence, market participants remain watchful for global economic developments and domestic fiscal conditions that could influence foreign exchange supply.
External Reserves Rise to $48.69 Billion
Nigeria’s gross external reserves continued their upward trend, rising to $48.685 billion as of May 18, 2026, from $48.575 billion recorded two days earlier.
The $110 million increase represents a 0.23% gain and reflects stronger foreign currency inflows, including higher oil receipts and improved investor participation.
The reserve level provides the CBN with a stronger buffer to meet foreign exchange obligations, support market liquidity, and maintain exchange rate stability.
Monetary Policy Support
The naira’s relative stability comes shortly after the Monetary Policy Committee (MPC) of the CBN retained the benchmark Monetary Policy Rate (MPR) at 26.5%, while maintaining the Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks.
