The Nigerian naira returned to positive territory on Monday, September 21, strengthening against the United States dollar in both the official and parallel foreign exchange markets after a difficult trading week.

The recovery came as Nigeria’s gross external reserves climbed above $54.72 billion, providing additional support for the local currency amid sustained foreign exchange inflows.

Despite the appreciation, trading activity in the official market declined, with both dollar turnover and the number of transactions falling compared with Friday’s figures.

Naira gains as CBN releases fresh dollar rates

According to the Central Bank of Nigeria’s daily foreign exchange update, the naira appreciated by approximately 0.11% to close at ₦1,329.8019 per dollar on Monday, compared with ₦1,331.2027 recorded on Friday.

Trading at the Nigerian Foreign Exchange Market (NFEM) took place between #1,327.01 and #1,336 per dollar, reflecting fluctuations in demand and supply during the session.

The appreciation marked a reversal of the local currency's weaker performance in the previous week.

However, the improvement came despite a slowdown in trading activity, suggesting that the naira's recovery was not accompanied by an increase in the volume of dollars traded.

Dollar trading falls by 28% despite naira recovery

CBN figures showed that interbank foreign exchange turnover dropped by 28.4% to $116.41 mil-lion on Monday, from $162.67 million at the previous close.

The number of transactions also declined from 127 to 102, indicating reduced trading activity among financial institutions.

The latest figures follow a difficult week in which total foreign exchange turnover fell by 30.23% to $2.37 billion, according to FMDQ data.

Nigeria's foreign reserves climb above $54.7bn

Meanwhile, Nigeria's gross external reserves reportedly exceeded $54.72 billion, supported by foreign exchange inflows from crude oil sales, diaspora remittances and other sources.

The growing reserves provide the CBN with an additional buffer against external economic shocks and could help maintain confidence in the foreign exchange market.

Some market analysts have consequently projected that the naira could strengthen towards #1,300 per dollar before the end of 2026, although this remains dependent on sustained inflows and market conditions, according to MarketForces Africa

Naira strengthens in parallel market

The recovery extended to the parallel market, where the naira appreciated marginally by 0.07% to close at #1,372 per dollar.

This narrowed the difference between the official and informal exchange rates to approximately #42 per dollar.

For Nigerian businesses dependent on imported goods and raw materials, sustained exchange rate stability could help ease foreign exchange costs. However, Monday's appreciation alone does not guarantee an immediate reduction in consumer prices.