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| Naira Notes |
ABUJA - June 25, 2026
The naira weakened to its lowest level in nearly two months on Wednesday despite growing foreign exchange reserves and improved liquidity in Nigeria's currency market.
Data released by the Central Bank of Nigeria (CBN) showed the local currency closing at ₦1,380.08 per dollar in the official market, representing a depreciation of ₦9.44 compared to the previous trading session.
The development has raised fresh questions about the factors driving exchange rate movements even as Nigeria records stronger reserve levels and increased foreign currency inflows.
Naira Extends Recent Losses
At the Nigerian Foreign Exchange Market (NFEM), the naira declined by 0.68 percent from Tuesday's closing rate of ₦1,370.64 per dollar.
The latest figure marks the weakest performance of the currency since late April, reflecting sustained pressure from foreign exchange demand across various sectors of the economy.
Currency analysts say demand for dollars from importers, manufacturers, investors, and travelers continues to outpace supply in certain market segments.
Foreign Reserves Reach 17-Year High
Despite the currency's decline, Nigeria's external reserves continued their upward trajectory.
According to data published by the Central Bank of Nigeria:
- External reserves rose to $51.17 billion
- This represents a 17-year high
- Reserves increased by more than $13.6 billion compared to the same period in 2025
- Growth reflects stronger foreign inflows and improved reserve accumulation
The reserve position strengthens the country's ability to meet international obligations and support foreign exchange stability when necessary.
Parallel Market Also Records Weakness
In the parallel market, often referred to as the black market, the naira traded around ₦1,400 per dollar, reflecting a modest decline from the previous day's rate.
The gap between official and parallel market rates remains relatively narrow compared to previous years, a trend analysts attribute to ongoing foreign exchange reforms.
Why Is the Naira Falling Despite Higher Reserves?
Economists point to several possible factors:
1. Strong Dollar Demand
Businesses and individuals continue to seek foreign currency for imports, international transactions, education, healthcare, and investment purposes.
2. Market Expectations
Investor sentiment and expectations about future exchange rate movements can influence demand for dollars even when reserves are rising.
3. Global Economic Pressures
International market conditions, commodity prices, and US monetary policy continue to affect emerging market currencies, including the naira.
4. Structural FX Challenges
While reserves provide support, broader issues such as export diversification and foreign investment inflows remain important for long-term currency stability.
What This Means for Nigerians
Exchange rate fluctuations affect nearly every aspect of the economy.
A weaker naira can lead to:
- Higher import costs
- Increased inflationary pressure
- More expensive international travel
- Rising costs for foreign education and medical services
- Higher production expenses for businesses dependent on imported inputs
However, exporters and businesses earning foreign currency may benefit from a weaker local currency.
Expert Outlook
Analysts say the direction of the naira in the coming weeks will depend on:
- CBN foreign exchange policies
- Reserve management strategies
- Foreign investment inflows
- Crude oil earnings
- Overall market confidence
Many believe reserve growth remains a positive indicator, but sustained currency stability will require broader improvements across the economy.
Why This Matters
The naira remains one of the most closely watched indicators of Nigeria's economic health.
Its performance affects inflation, investment, trade, business confidence, and household purchasing power.
As policymakers continue efforts to stabilize the economy, the relationship between reserve growth and exchange rate performance will remain under close scrutiny.
Key Takeaways
- Naira closed at ₦1,380.08/$ in the official market.
- The currency hit its lowest level in nearly two months.
- Nigeria's foreign reserves rose to $51.17 billion, a 17-year high.
- Parallel market rate settled around ₦1,400/$.
- Analysts say strong dollar demand continues to pressure the naira.
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