By Boluwatife Oshadiya, | May 22, 2026
Key Points
- Naira appreciated to ₦1,372.31 per dollar at the official foreign exchange market
- Interbank FX turnover rose sharply to $116.04 million across 105 deals
- Parallel market exchange rate strengthened to ₦1,380 per dollar amid improved liquidity
Main Story
The Nigerian naira appreciated against the United States dollar on Thursday as improved hard-currency liquidity boosted activity across the official foreign exchange market.
Data released by the Central Bank of Nigeria showed that the local currency strengthened to ₦1,372.31 per dollar at the Nigerian Foreign Exchange Market (NFEM), compared with ₦1,373.34 recorded in the previous trading session.
The naira traded within an intraday range of ₦1,370 to ₦1,374 per dollar, reflecting reduced pressure from foreign exchange demand and international payment obligations.
Interbank foreign exchange liquidity also improved significantly during the session. According to the CBN’s daily FX update, total turnover at the official market climbed to $116.04 million across 105 deals, up from $68.02 million recorded a day earlier.
The parallel market mirrored the appreciation trend as the naira strengthened to ₦1,380 per dollar, suggesting stronger buying interest in the local currency across both official and informal market segments.
Meanwhile, global oil prices weakened on Thursday as investors monitored ongoing diplomatic talks between the United States and Iran over Tehran’s nuclear programme and regional security tensions.
U.S. West Texas Intermediate crude dropped nearly 2% to settle at $96.35 per barrel, while Brent crude declined more than 2% to close at $102.58 per barrel after earlier gains triggered by reports surrounding Iran’s uranium enrichment stance.
U.S. President Donald Trump said earlier this week that he delayed planned military action against Iran to allow more time for diplomatic negotiations involving Gulf Arab allies.
The Issues
Nigeria’s foreign exchange market has remained sensitive to fluctuations in external reserves, oil prices and foreign portfolio inflows. Although recent reforms by the Central Bank have improved transparency and liquidity in the official market, pressure on the naira persists due to strong demand for dollars from importers and manufacturers.
Oil price movements also remain critical to the country’s exchange rate outlook because crude exports account for the bulk of Nigeria’s foreign exchange earnings. Sustained declines in oil prices could weaken dollar inflows and increase pressure on the naira if export revenues slow.
What’s Being Said
“The increase in FX turnover indicates stronger liquidity conditions and improved market confidence,” analysts at AIICO Capital Limited said in a market note.
“The naira’s relative stability reflects ongoing efforts by the CBN to improve supply within the official market,” Cowry Asset Management stated.
Financial analyst Bismarck Rewane noted that sustained liquidity improvements would remain crucial to preserving exchange rate stability. “The market is responding positively to improved dollar availability, but long-term stability depends on consistent FX inflows and stronger export earnings,” he said.
What’s Next
- Investors will continue monitoring global oil price movements and geopolitical tensions in the Middle East
- Market participants are awaiting further foreign exchange policy guidance from the Central Bank of Nigeria
- Analysts expect the naira to remain relatively stable in the near term if FX liquidity conditions improve further
Bottom Line
The Bottom Line: The naira’s latest appreciation signals improving liquidity conditions in Nigeria’s foreign exchange market, but external risks — particularly oil price volatility and geopolitical uncertainty — continue to pose significant threats to long-term currency stability.
