How Naira Gained N4.19 In July On Stronger Reserves And Dollar Liquidity – CBN

The naira ended July with a modest gain in the official foreign exchange market, saying the currency was supported by steady dollar liquidity and stronger external reserves.

Data from the Central Bank of Nigeria (CBN) showed the naira appreciated by N4.19 against the dollar, with the greenback closing at N1,368.22 on Friday — the last trading day of July — marking a 0.3 perbl cent improvement from N1,372.41 at the start of the month on the Nigerian Foreign Exchange Market (NFEM).

However, the local currency had weakened over the week. It said the naira fell by N6.13, or 0.5 per cent, compared with N1,362.09 recorded in the official market a week earlier.

Traders in the parallel, or black, market told reporters the naira closed July at N1,415 per dollar, which the traders said was a N7 or 0.5 percent depreciation from N1,408 at the start of the month. The gap between the official and parallel market rates widened to about 3.45 percent.

According to the data, activity at the interbank FX market strengthened in July as total turnover rose 26.97 per cent month-on-month to $3.39 billion at the close of July from $2.67 billion in June, even as the number of deals fell by 10.41 percent, from 2,538 to 2,274.

The NFEM figures for the final trading day of July were not available at the time of reporting, market data up to July 30 showed total turnover eased by 3.56 percent to $12.46 billion in July from $12.92 billion in June. The number of deals also declined by 4.64 percent to 6,332 in July from 6,640 in June.

Commenting on external buffers, the CBN said Nigeria’s foreign reserves — which it uses to support the naira and meet external obligations — stood at $51.92 billion as of July 30, 2026. The bank said this figure represented a 0.89 percent increase from $51.46 billion at the end of June.

Separately, FSDH Merchant Bank said in a report that Nigeria’s external reserves had climbed to $51.7 billion as of July 9, 2026 — the highest level in more than 17 years, the bank reported. FSDH said reserve accumulation picked up in the second half of 2025 after a period of stagnation, giving the CBN a stronger buffer to manage shocks, meet foreign currency obligations and boost market confidence.

FSDH said the improvement in reserves was driven by sustained trade surpluses, stronger foreign capital inflows and reforms that improved FX market liquidity. The bank added that autonomous inflows remained the main source of FX supply and were supporting market liquidity and exchange-rate stability, while CBN interventions had eased as market-based inflows improved.

FSDH cautioned that while positive net FX flows had strengthened external liquidity, the composition of those inflows mattered. The report said durable exchange-rate stability would require sustained portfolio inflows, stronger export earnings and more long-term capital.

The CBN’s 2025 Annual Report and Statement of Accounts showed that autonomous sources made up the largest share of Nigeria’s FX inflows. The report said total inflows into the economy rose by 13.81 percent to $109.86 billion in 2025, with autonomous inflows up 25.12 percent to $70.54 billion from $56.38 billion in 2024. The CBN attributed the rise largely to higher non-oil export receipts and increased over-the-counter purchases, particularly capital importation.