Naira Defies Trend as Stronger Dollar Fails to Weaken Nigerian Currency

The Nigerian naira has continued to defy the trend of emerging market currencies weakening against the strengthening US dollar. Despite the greenback's recent surge, driven largely by geopolitical uncertainty and expectations surrounding US monetary policy, the naira has maintained its upward momentum in Nigeria's foreign exchange market.

This is attributed to improved domestic liquidity, stronger external reserves, and sustained investor confidence in the Central Bank of Nigeria's (CBN) foreign exchange reforms. The CBN data showed that the naira appreciated by N18.09 week-on-week, closing at N1,362.09 per dollar on Friday from N1,380.18 recorded the previous Friday.

The sharp increase in foreign exchange market liquidity has been a significant driver of the naira's resilience. Total turnover at the NFEM window surged by 119.9 percent to $4.2 billion on Thursday from $2.01 billion recorded on Monday. This indicates a significant increase in the volume of foreign exchange transactions taking place in the official market.

Olayemi Cardoso, governor of the CBN, disclosed that gross external reserves had increased to $52.52 billion as of July 17, 2026, from $50.47 billion at the end of May. The reserves now provide approximately 11 months of import cover, significantly above the international benchmark of three months.