Nigerian Naira Depreciates Against Dollar Despite Rising External Reserves

The Central Bank of Nigeria reported a series of depreciations for the naira against the US dollar during the final week of June 2026. In the official Nigerian Foreign Exchange Market, the currency weakened from 1,370.64 per dollar on Tuesday, June 23, to 1,389 per dollar by Wednesday, June 24. This downward trend continued into the following days, with the currency closing at 1,383.00 on Thursday, June 25, and experiencing its steepest daily decline in two weeks on Friday, June 26, when it hit 1,380.08.

Parallel market rates remained more stable during this period, though reporting varied across sources. Some data indicated rates holding between 1,385 and 1,395 per dollar, while Aboki FX reported selling rates reaching 1,400 per dollar by June 26. This volatility in the official window resulted in a significant narrowing of the margin between the official and parallel market rates, which dropped to as little as 4 naira per dollar on June 24.

Despite the currency's bearish performance, Nigeria's external reserves grew steadily. The reserves rose to 51.14 billion dollars on June 22 and continued to climb, reaching 51.17 billion dollars by June 23. This disconnect between rising reserves and a weakening currency suggests that increased foreign holdings are not currently sufficient to offset market pressures such as high import demand or portfolio outflows.

The persistent depreciation despite stronger reserves signals an ongoing challenge for monetary policy, as the Central Bank of Nigeria must balance reserve accumulation with the need to stabilize the exchange rate against persistent market volatility.