Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Nigerian naira opened the month of August on a strong footing, recording significant gains against the United States dollar across both the official and parallel foreign exchange markets on Monday, August 3, 2026, as foreign exchange turnover surged by more than 130 per cent. The naira strengthened to N1,408 per dollar in the parallel market, marking a N7 appreciation from the N1,415 recorded over the preceding weekend, according to data from Bureau de Change operators and market sources monitored by Vanguard and The Leader Nigeria. The local currency also posted gains in the official window, with the Central Bank of Nigeria's indicative exchange rate falling to N1,365 per dollar from N1,368 per dollar last week, representing a N3 appreciation. The positive movement effectively narrowed the margin between the parallel and official markets to N43 per dollar from N47 per dollar on the previous Friday.
The appreciation was supported by a sharp rise in activity in the interbank foreign exchange market. Data from the Central Bank of Nigeria showed that the number of deals more than doubled to 138 on Monday, a 105.97 per cent increase from 67 on Friday, July 31. Total turnover surged by 132.33 per cent to $137.05 million, compared with $58.99 million recorded at the previous session. BusinessDay reported that the naira closed at N1,364.83 per dollar on Monday at the Nigerian Foreign Exchange Market, a marginal appreciation from N1,368.22 on Friday. Nigeria's external reserves stood at $51.92 billion as of July 31, 2026, providing the Central Bank with capacity to support the naira and meet external obligations.
Analysts at Coronation Merchant Bank said the naira had weakened across both markets in the preceding week as persistent foreign exchange demand continued to weigh on the currency despite ongoing policy support. However, they expect the naira to remain broadly stable in the near term, supported by the Central Bank's sustained interventions and Nigeria's healthy external reserve position, which should help contain exchange rate volatility. Seasonal foreign exchange demand associated with summer travel, offshore tuition payments, and importer obligations is likely to keep pressure on the market, but the scope for meaningful appreciation remains limited unless foreign exchange inflows strengthen further.
At the Lagos parallel market, currency traders quoted the dollar at approximately N1,408 for selling and N1,395 for buying on Monday, according to market sources. The official market, however, maintained a narrower spread, reflecting the Central Bank's continued intervention to improve market liquidity and moderate exchange rate volatility. The naira's performance at the start of August follows a mixed July, during which the currency had closed the month at N1,368.22 per dollar after experiencing intermittent pressures from demand for foreign exchange.
Meanwhile, the Central Bank of Nigeria continues to implement measures aimed at stabilising the currency and enhancing liquidity in the foreign exchange market. The apex bank's data indicated that the naira was unchanged in the official market at N1,368.22 per dollar on Friday, while it weakened by N10 in the parallel market to N1,415.00 per dollar. However, Monday's rebound across both markets suggests that recent interventions may be yielding results, even as the broader economic environment remains challenging. Market participants will be watching closely to see whether the naira can sustain its gains in the coming days, as Nigeria navigates a complex landscape of external pressures, domestic policy adjustments, and the ongoing drive to boost foreign exchange inflows.
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