The Nigerian naira strengthened to N1,364.83 per US dollar at the official foreign exchange market on Monday, August 4, 2026, gaining N3.39 or 0.25% from the previous session's close of N1,368.22. This appreciation came amid a dramatic surge in trading activity, with total dollar turnover soaring by over 132% to $137.05 million, up from $58.99 million recorded on Friday, according to data from the Nigerian Foreign Exchange Market (NAFEM).
Mixed Performance Against Other Currencies
While the naira gained ground against the dollar, it slipped slightly against other major currencies. The naira lost 10 kobo against the British pound, closing at N1,837.89 per pound compared to N1,837.79 previously. Against the euro, it shed six kobo to settle at N1,573.93, down from N1,573.87 in the prior session.
In the parallel market, the naira traded at N1,405 per dollar, unchanged from Friday, while the GTBank forex counter quoted N1,374 per dollar, also steady. Rates at these segments held firm, indicating stability in the broader FX market.
Surge in Trading Activity Signals Improved Liquidity
The number of completed interbank deals at the Nigerian Foreign Exchange Market (NFEM) window climbed to 138 from 67 in the previous session, signalling a strong pickup in participation among authorised dealers, as reported by The Sun. This surge in trading volumes points to improved dollar supply and increased market confidence.
Lagos-based foreign exchange trader Abdullahi Aliyu attributed the naira's resilience to a combination of Central Bank of Nigeria (CBN) market support, better crude oil production figures, and favourable global oil prices. These factors have collectively boosted dollar inflows from Nigeria's oil exports.
“The CBN has been active in supplying dollars into the market. Also, improved crude oil production and supportive international oil prices have boosted FX inflows from oil exports,” Aliyu said.
He cautioned that the market's direction in the months ahead would depend on whether these inflows remain strong enough to satisfy demand, particularly during the typically high-pressure final quarter of the year.
Analysts Point to CBN Policy and Investor Interest
Market analysts also highlighted the CBN's tight monetary policy stance as a key factor attracting foreign portfolio investors to naira-denominated assets. The combination of policy support and improved external liquidity has helped stabilise the currency.
The official FX market recorded over $137 million in trades on Monday, reflecting heightened activity. This comes as Nigeria's external reserves have climbed to approximately $48.5 billion, reaching their highest level in more than a decade, according to earlier reports by Legit.ng.
External Reserves Strengthen
The reserves have increased by about $2.94 billion since the beginning of the year, rising from $45.56 billion recorded on January 1. This represents a year-to-date growth of 6.45%, underscoring improved external liquidity and stronger reserve buffers, which provide a cushion for the naira.
Official Exchange Rates on Monday, August 4, 2026
- CFA – N2.39
- Chinese Yuan/Renminbi – N202.11
- Danish Krona – N210.53
- Euro – N1,573.93
- Japanese Yen – N8.70
- Saudi Riyal – N363.38
- South African Rand – N82.70
- Special Drawing Rights (SDR) – N1,864.77
- Swiss Franc – N1,686.86
- Pounds Sterling – N1,837.89
- US Dollar – N1,364.83
- West African Unit of Account (WAUA) – N1,865.14
- UAE Dirham – N371.60
As the naira shows signs of stability, market participants will be watching closely to see if the trend holds, especially with the fourth-quarter demand pressures looming. The CBN's continued intervention and oil revenue inflows will be critical in maintaining this positive momentum.
