The Nigerian naira strengthened significantly against the US dollar on Tuesday, August 18, 2026, gaining about N9 as increased foreign exchange liquidity and Central Bank of Nigeria (CBN) reforms continued to support the currency.

Data from the Nigerian Foreign Exchange Market (NFEM) showed that the naira appreciated to N1,343.32 per dollar, compared with N1,349.5372 recorded in the previous trading session.

The latest movement places the naira at a five-month high and underscores the impact of recent measures by the apex bank to improve liquidity in the foreign exchange market.

CBN opens access to forex liquidity

The CBN has continued to introduce measures aimed at improving the supply and functioning of the foreign exchange market, including easing restrictions that previously limited banks and financial market operators from accessing Open Market Operations (OMO).

The increased access to liquidity has provided banks and other market participants with more flexibility, helping to ease pressure on the naira and strengthen confidence in the currency market. The naira’s latest appreciation has also been supported by improvements in Nigeria’s external reserves, which have strengthened the country’s ability to meet foreign exchange obligations and support import demand.

Reserves hit 17-year high

The CBN recently disclosed that Nigeria’s external reserves had climbed to about $52 billion, their highest level in 17 years.

The stronger reserve position has boosted investor confidence while providing a larger buffer for the country to finance imports and meet external obligations.

Analysts say sustained reserve accumulation, improved forex liquidity and greater transparency in the market could help reduce volatility and provide businesses with more certainty when planning investments and imports.

Inflation picture remains mixed

The naira’s relative stability has also coincided with a more moderate headline inflation rate, although food prices remain a major concern for households. According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation eased to 15.43 per cent in July 2026.

However, food inflation moved in the opposite direction, rising to 20.31 per cent annually from 17.52 per cent in June.

The divergence highlights the uneven impact of currency stability on consumers, with improved forex conditions yet to fully translate into lower food prices. Despite the pressure, economists view the naira’s recent performance as a positive signal for the broader economy. A more stable currency could help businesses plan better, reduce imported cost pressures and strengthen investor confidence if the trend is sustained.

CBN crashes dollar as demand increases

Legit.ng earlier reported that the CBN of Nigeria sharply ramped up its foreign exchange interventions in March 2026, selling $953.41m to the market in what the data shows is the strongest central bank FX activity since April 2025.

Figures published in the CBN's latest Quarterly Statistical Bulletin showed that spot market transactions made up the bulk of the March sales, with $950.10m channeled through that route and a further $3.31m directed to Ministries, Departments and Agencies.

The March figure represents a dramatic swing from the opening months of 2026. The CBN sold just $58.93m in January and $244.13m in February, meaning March's intervention was more than 16 times the January level and roughly 291 per cent above February's sales.