The naira strengthened against the US dollar, British pound, and euro at the official foreign exchange market on Thursday, October 16, 2026, as foreign exchange supply improved and interbank trading activity slowed, according to data from the Central Bank of Nigeria (CBN). The local currency closed at N1,331.6139 per dollar, compared with N1,332.5893 in the previous session, representing a 0.07% appreciation.
Naira Gains Against Dollar, Pound, and Euro at Official Window
Data published by the CBN showed that the naira appreciated by 0.07% against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Thursday. During intraday trading, the exchange rate fluctuated between N1,327 and N1,333.50 per dollar, reflecting relatively stable trading conditions at the official window, according to a report by Market Forces Africa.
The naira also extended its gains to other major currencies. It appreciated by 0.07% against the British pound to close at N1,764.26 per pound, and gained 0.07% against the euro, settling at N1,490.48. The marginal appreciation suggests that improved dollar availability helped support the naira despite continued demand for foreign currency from businesses and other market participants.
Interbank Turnover Falls 59% as FX Supply Improves
Foreign exchange liquidity improved as foreign portfolio investors supported market activity, while non-bank corporates and currency inflows from exporters and importers contributed to supply. However, interbank foreign exchange turnover dropped sharply, indicating a significant slowdown in trading activity among financial institutions.
According to the CBN data, turnover fell by approximately 59% to $201.562 million from $490.855 million recorded in the previous session. The number of transactions also declined, with deals at the interbank window dropping to 128 from 179 on Wednesday. The fall in turnover suggests that fewer transactions were executed during the session, even as the naira recorded modest gains against major international currencies.
Parallel Market Gap Narrows to 2.88%
The parallel market recorded similar movements, with the dollar declining by 0.29% to N1,370. The pound fell by 0.55% to N1,810, while the euro dropped by 0.33% to N1,505. These movements narrowed the gap between the official and parallel market dollar rates to 2.88%, compared with 3.11% previously. The smaller spread indicates a slight convergence between the two markets, although their exchange rates remain different.
Oil Prices Above $100 Could Support Naira Stability
Market analysts expect the naira to remain relatively stable at the official window in the near term, with the gap between the official and parallel market rates staying below 3%. According to AIICO Capital Limited, crude oil prices above $100 per barrel could help sustain foreign exchange inflows and support the local currency. Higher oil prices can strengthen Nigeria's foreign exchange position by boosting potential export earnings, although actual gains depend on production levels, sales, and the volume of proceeds repatriated into the domestic market.
The naira has also recorded a notable year-to-date gain against the dollar at the NFEM, with the dollar down 7.25% against the local currency over the period, according to the supplied market data. However, sustained appreciation will depend on the consistency of dollar inflows, foreign investor participation, and demand for foreign currency from businesses and other market participants.
In related developments, Legit.ng earlier reported that Nigeria's naira held relatively steady against the United States dollar in early October, offering some breathing room for businesses and households whose expenses are exposed to exchange-rate swings. Market reports for Friday, October 9, placed the currency at approximately ₦1,329.34 per dollar at the Nigerian Foreign Exchange Market (NFEM), while the parallel market quoted around ₦1,385.
