Nigeria’s currency weakened modestly on Tuesday as dollar trading activity dropped sharply, while external reserves climbed to $52.14bn
The Naira exchange rate weakened modestly on Tuesday, August 11, 2026, as reduced foreign exchange trading activity put pressure on the Nigerian currency, even as the country’s external reserves continued their steady climb.
Also read: Naira ends July weaker at N1,368.22/$
Data from the Central Bank of Nigeria showed that the naira closed at N1,364.89 per US dollar at the Nigerian Foreign Exchange Market, down N4.75 from N1,360.14 recorded on Monday.
The movement represented a 0.35 per cent depreciation against the dollar, marking another relatively small adjustment in the official market.
In the parallel market, however, the naira remained unchanged at N1,425 per dollar, leaving a gap of about N60 between the two market rates.
The more striking development came from trading activity.
Interbank turnover plunged by 86.41 per cent, falling to $29.06m on Tuesday from $213.85m recorded in the previous session.
The number of transactions also dropped sharply, from 182 deals to 47, representing a 74.18 per cent decline.
Activity had already been subdued in the broader official market. NFEM turnover fell by 48.24 per cent to $646.51m on Monday from $1.25bn on Friday.
The lower trading volumes came despite continued improvement in Nigeria’s external buffers.
CBN data showed that the country’s foreign exchange reserves rose to $52.14bn as of August 10, compared with $40.29bn recorded on August 8, 2025. The increase represents a substantial 29.41 per cent year-on-year rise.
The stronger reserve position gives the central bank greater capacity to meet external obligations and manage periods of heightened demand for foreign currency.
The CBN also stepped up its foreign exchange sales in July, releasing about $1.4bn, compared with $320m in June, as it responded to seasonal demand pressures.
The increase in intervention suggests that the authorities are continuing to balance market-driven price discovery with measures aimed at maintaining orderly conditions in the foreign exchange market.
Despite the naira’s marginal decline on Tuesday, analysts at Quest Merchant Bank maintained that Nigeria’s external position remained favourable.
They expect the reserves to strengthen further if supportive oil prices, capital inflows and the current monetary policy framework continue to provide support.
The latest movement therefore presents a mixed picture for the currency.
While the naira experienced a modest setback against the dollar, the significant rise in reserves provides an important buffer for the economy and could help strengthen confidence in the country’s external position.
For businesses and consumers exposed to imported goods, however, the parallel-market rate remains an important consideration, particularly while the gap between official and alternative-market pricing persists.
The latest figures also highlight how sharply daily FX liquidity can fluctuate.
Tuesday’s steep fall in transaction volumes does not, by itself, establish a sustained change in demand or supply conditions, but it underscores the sensitivity of Nigeria’s foreign exchange market to shifts in liquidity and seasonal demand.
Also read: Naira gains strength as Dollar falls to ₦1,362 in FX market
Nigeria’s improving reserves provide a powerful cushion, but the durability of the naira’s recent stability will continue to depend on foreign exchange liquidity, oil receipts, capital inflows and the effectiveness of the CBN’s market policies.
David Okere is a journalist and contributor to Freelanews.com, covering business, governance, public affairs, and human-interest stories with a commitment to accuracy, balance, and public interest reporting.
