The naira on Thursday strengthened across Nigeria’s foreign exchange (FX) markets, reaching a five-month high, as liquidity improved following a Central Bank of Nigeria (CBN) directive on diaspora remittance flows. Official data showed the naira gained N2.82 to close at N1,383.88 per dollar, a 0.2% increase from Wednesday’s N1,386.70 at the Nigerian Foreign Exchange Market (NFEM).
At the parallel, or black market, the local currency also appreciated slightly, rising by N3 to N1,412 per dollar. Despite these gains, the spread between official and parallel market rates remained steady at N29, highlighting continuing market dynamics as Nigeria balances formal and informal FX channels.
While the naira strengthened, Nigeria’s external reserves continued to decline, falling for the eighth straight session to $49.52 billion as of March 25, 2026, down from a recent peak of $50.02 billion on March 11. Analysts note that while remittance-led liquidity provides short-term support, broader macroeconomic pressures continue to weigh on reserves.
The uptick in the naira follows a new CBN circular titled “Measures to Further Enhance Compliance in the Remittance Space,” which directs all International Money Transfer Operators (IMTOs) to route remittance inflows through designated naira settlement accounts at banks. This move, according to the Financial Markets Dealers Association (FMDA), is a forward-looking structural reform aimed at increasing transparency, market efficiency, and coordination within Nigeria’s FX system.
Under the new framework, IMTOs like Western Union and MoneyGram must channel all inflows through authorised dealer banks for conversion into naira. Previously, conversions occurred through multiple channels with variable pricing, but the updated system standardizes settlements, strengthens the role of formal banking, and improves traceability. Experts say this approach not only deepens liquidity but also reinforces market stability, benefiting households and the broader economy.
source: Business day