The naira weakened 0.05% against the US dollar on Monday, closing at ₦1,488.6017 per dollar at the official foreign exchange window according to updated Central Bank of Nigeria (CBN) data.
The currency faced additional pressure during intraday trading, with the spot rate trading within aband of ₦1,492 to ₦1,486 per dollar.
In stark contrast to the official market’s weakness, the naira demonstrated strength at the parallel market, appreciating 0.25% to close at an average of ₦1,517 per dollar. (See How the Naira Was Stabilized: 6 Key CBN Policies). This divergence highlights the absence of significant hard currency demand at the unofficial exchange market, creating a more favourable environment for the local currency.
The gap between official and parallel market rates has narrowed considerably, suggesting improved foreign exchange availability across different market segments. Market analysts view this convergence as a positive sign for exchange rate stability and monetary policy effectiveness.
External Reserves Surge to Six-Year High
Nigeria’s gross external reserves achieved a significant milestone, crossing the $42 billion threshold for the first time since September 2019. CBN data shows reserves increased to $42.032 billion as of September 19, 2025, demonstrating the country’s improved foreign exchange position.
This reserve buildup occurs amid fluctuating crude oil prices in the global commodity market, highlighting Nigeria’s enhanced fiscal management. The robust reserve position provides the central bank with additional ammunition to defend the naira and maintain exchange rate stability.
Dollar Index
The US Dollar Index (DXY) declined 0.32% to 97.33 on September 22, 2025, following a three-day rally that preceded this correction. Market movements were primarily driven by investor reactions to the Federal Reserve’s recent 50-basis-point interest rate cut and anticipation surrounding upcoming Fed speeches and PCE inflation data.
Technical indicators paint a bearish picture for the dollar, with the DXY opening at 97.66, reaching a high of 97.82, and touching a low of 97.31 during the trading session. The “Strong Sell” technical signal and potential for further declines if support near 97.00 breaks could provide relief for emerging market currencies like the naira.
