Naira Falls to N1,361.5/$ as FX Market Turnover Plunges 57% Despite Rising External Reserves
The Nigerian naira weakened slightly against the US dollar on Wednesday, closing at N1,361.5/$ in the Nigerian Foreign Exchange Market (NFEM), compared to N1,356.5/$ recorded in the previous trading session. The depreciation came amid a sharp decline in market activity, with foreign exchange turnover dropping by more than half despite continued inflows into the country’s reserves.
Data released by the Central Bank of Nigeria (CBN) showed that daily turnover in the official foreign exchange market fell by 57 percent to $54.29 million from $125.69 million recorded a day earlier. The number of completed deals also declined significantly from 125 to 74, reflecting slower trading activity and reduced market participation. During the session, the naira traded within a narrow range of N1,357/$ to N1,361.5/$, while the average exchange rate settled at N1,360.13/$.
The latest performance comes as global financial markets remain heavily influenced by developments in the United States and ongoing tensions in the Middle East. A stronger US dollar, supported by expectations of further interest rate hikes by the Federal Reserve, has continued to put pressure on emerging market currencies. Investors have also increased demand for the greenback as a safe-haven asset amid geopolitical uncertainties, adding to the challenges facing currencies such as the naira.
Despite the currency’s slight decline, Nigeria’s external reserves continue to show impressive growth. According to CBN figures, the country’s reserves rose to $50.89 billion as of June 16, 2026, driven by sustained foreign currency inflows and improved reserve accumulation. The rising reserves provide the apex bank with greater capacity to support liquidity in the foreign exchange market and strengthen investor confidence during periods of global volatility.
The steady increase in reserves highlights the impact of ongoing foreign exchange reforms introduced by the CBN. Analysts believe stronger reserve levels could help cushion the economy against external shocks and support long-term exchange rate stability. While short-term pressures from global market developments persist, Nigeria’s growing reserves remain a positive signal for the country’s foreign exchange outlook.
source: nairametrics