By Boluwatife Oshadiya | June 22, 2026
Key Points
- The naira weakened against the US dollar at the official market as foreign exchange demand outpaced supply
- Nigeria’s external reserves rose above $51 billion, strengthening the Central Bank’s foreign exchange buffer
- Increased demand from offshore investors exiting equity positions contributed to pressure on the local currency
Main Story
The naira softened against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Friday as foreign exchange demand continued to exceed available supply despite rising external reserves.
Market data showed that the local currency traded within a range of ₦1,363 and ₦1,370 per dollar during the session, with some transactions executed at rates as high as ₦1,374/$, according to Central Bank of Nigeria (CBN) data.
Analysts attributed the pressure on the naira to increased demand for dollars from foreign portfolio investors repatriating funds after reducing exposure to Nigerian equities. The development coincided with a sharp correction in the domestic stock market, where investors recorded significant losses during the week.
The local currency briefly strengthened to ₦1,356/$ amid improved liquidity from exporters, foreign investors and non-bank corporates before weakening later in the session as demand intensified.
Meanwhile, Nigeria’s gross external reserves climbed to $51.035 billion as of June 18, 2026, up from $50.962 billion recorded a day earlier. The increase extends a recent trend of reserve accumulation supported by oil export receipts, diaspora remittances and other foreign currency inflows.
The stronger reserve position enhances the CBN’s ability to intervene in the foreign exchange market and support liquidity when necessary.
What’s Being Said
“Official market depreciation was largely driven by foreign investors exiting positions in the equities market and converting naira holdings into dollars,” Broadstreet analysts told MarketForces Africa.
Independent market analysts noted that reserve growth remains a positive signal for currency stability but warned that sustained pressure from capital outflows could continue to weigh on the naira in the near term.
What’s Next
- Investors will monitor the CBN’s foreign exchange interventions and liquidity management measures
- Market participants will track foreign portfolio flows as earnings season gathers momentum
- Global oil price movements and reserve accretion trends are expected to remain key drivers of naira performance
Bottom Line
The Bottom Line: Nigeria’s growing foreign reserves provide an important buffer against exchange-rate volatility, but persistent dollar demand from investors and businesses continues to test the naira’s resilience. The balance between reserve growth and market liquidity will remain critical in determining the currency’s near-term direction.
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