By Boluwatife Oshadiya | June 2, 2026
Key Points
- Naira closed May at ₦1,373.25/$1 in the official market, strengthening slightly from April
- Nigeria’s gross external reserves rose above $49 billion amid stronger FX inflows and investor participation
- Narrowing gap between official and parallel market rates signals improving foreign exchange market stability
Main Story
Nigeria’s currency opened June on a firmer footing as rising foreign exchange reserves and renewed foreign investor participation continued to support stability in the foreign exchange market.
Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira closed May at ₦1,373.25 per dollar, improving from ₦1,374.94 per dollar recorded at the end of April. In the parallel market, the currency also strengthened by ₦5 to ₦1,390 per dollar from ₦1,395 per dollar the previous week.
The improvement narrowed the gap between the official and parallel market rates to ₦16.75 per dollar from ₦19.54 per dollar, a development analysts view as a positive signal for market confidence and price discovery.
The gains came as Nigeria’s gross external reserves continued their upward trajectory, rising by more than $451 million week-on-week to approximately $49.34 billion. Recent Central Bank of Nigeria data also showed reserves approaching the $50 billion mark, supported by oil export earnings, improved remittance inflows, and renewed foreign portfolio investments.
Market participants have also linked improved liquidity conditions to the Central Bank of Nigeria’s revised foreign exchange guidelines, which are aimed at improving transparency, broadening participation, and allowing greater market flexibility.
Meanwhile, global oil prices retreated sharply last week. Brent crude fell 9.86% week-on-week to $94.87 per barrel from $105.25 as easing tensions between the United States and Iran reduced immediate concerns over disruptions to global oil supply routes.
Reports of diplomatic progress between Washington and Tehran, alongside signs of stabilisation in shipping activities through the Strait of Hormuz, helped calm markets and ease fears of prolonged supply interruptions.
What’s Being Said
“Gross external reserves remained robust at $49.49 billion as of May 15, 2026, compared with $48.35 billion at the end of March 2026, sufficient to cover 9.04 months of imports for goods and services,” said Olayemi Cardoso during the latest Monetary Policy Committee briefing.
Analysts said stronger reserve buffers are helping to reinforce investor confidence and provide support for exchange rate stability amid ongoing economic reforms.
Energy market analysts also noted that while oil prices have eased, geopolitical risks remain elevated and could quickly reverse current price trends if diplomatic negotiations deteriorate.
What’s Next
- Investors will continue monitoring Nigeria’s external reserves for a possible move above the $50 billion threshold
- Market attention remains focused on implementation of the revised foreign exchange framework and its impact on liquidity
- Oil traders are expected to closely track developments in US-Iran negotiations and shipping activity through the Strait of Hormuz
- Future crude price movements will remain a key determinant of Nigeria’s foreign exchange earnings and reserve growth
Bottom Line
The Bottom Line: Nigeria’s foreign exchange market is showing signs of improved stability as reserves strengthen and the gap between official and parallel market rates narrows. However, sustaining the naira’s recent gains will depend heavily on continued capital inflows, reserve accumulation, and the durability of global oil market conditions.
