Nigerian Naira Weakens as Foreign Exchange Reserves Decline

The Central Bank of Nigeria reported a decline in foreign exchange reserves to $51.96 billion as of July 27, 2026, down from $52.02 billion on July 24. This $60 million drop ended a four-day period of growth and coincided with a continued depreciation of the naira against the US dollar.

On July 28, the naira fell to 1,364 per dollar in the Nigerian Foreign Exchange Market (NFEM), eventually weakening further to 1,365.53 per dollar by Tuesday. In the parallel market, the currency dropped to 1,407 per dollar on July 28, with subsequent trading between 1,405 and 1,415 per dollar. This trend widened the gap between official and off-market pricing to approximately 43 naira per dollar.

Market analysts attribute the volatility to thin foreign-exchange liquidity, reduced oil earnings, and persistent dollar demand. Additionally, interbank turnover at the NFEM plummeted 55.5 percent to 39.6 million naira. Traders are also adjusting holdings in anticipation of an interest-rate decision by the Federal Reserve Bank of the US, a move that typically strengthens the dollar against emerging-market currencies.