Nigeria’s foreign exchange market is showing greater stability, with stronger external reserves, improved FX liquidity and monetary policy measures helping to limit pressure on the naira, according to a market assessment by Nairametrics.
The Central Bank of Nigeria’s (CBN) latest policy reset, which cut the Monetary Policy Rate (MPR) by 350 basis points from 26.5% to 23%, has so far not triggered a renewed slide in the currency. The official exchange rate has remained around N1,327-N1,330 per dollar, while the gap with the parallel market has narrowed significantly. (Nairametrics)
Nairametrics reported that the stronger position is being supported by rising external buffers, including foreign exchange reserves of more than $55 billion. The report linked the improvement to sustained inflows from the oil and gas sector, diaspora remittances and trade receipts.
The higher reserve position has provided the CBN with greater capacity to meet legitimate foreign exchange demand and counter speculative pressure, while continued use of Open Market Operations (OMO) and other liquidity-management measures has also supported conditions in the FX market. (Nairametrics)
The naira has, however, continued to experience intermittent weakness when FX turnover falls or corporate demand for dollars rises. Nairametrics noted that relatively thin market liquidity means individual corporate transactions can sometimes trigger short-term swings in the exchange rate.
At the same time, demand for naira-denominated assets remains strong, with investors continuing to participate in Treasury Bills and OMO auctions despite the reduction in the policy rate. Yields on some short-term instruments have declined following the MPR cut, but auction demand has remained substantial. (Nairametrics)
The CBN’s own data currently place the MPR at 23% and inflation at 15.39%, while the official exchange rate is around N1,329 per dollar. (Central Bank of Nigeria)
Nairametrics cautioned that the outlook still carries risks, particularly if lower domestic yields reduce the attractiveness of naira assets to foreign portfolio investors or if domestic demand for dollars rises sharply. It also identified sustained crude oil production and continued FX inflows as important to maintaining the current level of currency stability. (Nairametrics)
2. Pound/naira
Naira extends gains as pound falls to N1,767
The naira has extended its recent gains against the British pound, with sterling falling to about N1,767 at the latest market close as the Nigerian currency maintains its stronger position following the Central Bank of Nigeria’s interest-rate cut.
According to Nairametrics, the pound’s latest level represents a significant decline from the above-N1,900 rate recorded against the naira in the first quarter of 2026. The movement has come even as the CBN lowered its Monetary Policy Rate from 26.5% to 23% in September. (Nairametrics)
The naira’s resilience has been supported by improved foreign exchange liquidity and stronger external buffers. Nigeria’s gross external reserves have risen above $55 billion, while continued inflows from the oil and gas sector have helped strengthen the supply of foreign currency.
Nairametrics also pointed to strong demand for naira assets, including Treasury Bills and Open Market Operations securities, as another factor supporting the currency despite the reduction in interest rates. (Nairametrics)
The CBN’s latest policy decision set the MPR at 23%, while its official data put the naira at about N1,329 per dollar. Inflation was reported at 15.39%. (Central Bank of Nigeria)
The movement in the pound is also being influenced by developments in global currency markets. Nairametrics reported that sterling remained near its weakest level against the US dollar since late June, with the pound trading around $1.32 amid pressure from elevated UK bond yields and fiscal concerns ahead of the country’s October 28 Autumn Budget. (Nairametrics)
For Nigeria, the latest movement means lower naira costs for pound-denominated transactions, although exchange-rate conditions remain dependent on sustained FX inflows, market liquidity and broader movements in global currencies.

