The Nigerian naira continued its decline against the United States dollar at the Nigerian Foreign Exchange Market (NFEM) window, marking the third straight trading session of depreciation as demand for foreign currency intensified across the banking system.
This renewed pressure has prompted major banks, including Access Bank, United Bank for Africa (UBA), Zenith Bank, and others, to quote higher rates for dollar transactions amid persistent FX scarcity and increased payments from eligible market participants.
Official Exchange Rate Declines
According to the Central Bank of Nigeria's (CBN) daily foreign exchange publication, the official exchange rate closed at N1,375.6219 per dollar on Tuesday, compared to N1,373.1670 recorded at the start of the week. The naira traded within an intraday range of N1,372.7500 and N1,377.9900 per dollar, highlighting growing liquidity constraints in the FX market.
Analysts attribute the sustained pressure to stronger dollar demand from importers, manufacturers, and other approved market participants seeking access to foreign exchange through official channels. The tighter supply has forced banks to revise their dollar quotes upward, creating concerns among businesses and individuals relying on foreign currency for transactions, tuition payments, travel, and imports.
Parallel Market Sees Slight Improvement
In a surprising twist, the parallel market recorded a slight improvement as the naira appreciated to N1,390 per dollar among Bureau de Change (BDC) operators licensed for information segment FX trades. This development helped narrow the exchange rate gap between the official and parallel markets to N14.38 per dollar from the previous N21.84, offering a modest sign of stability.
External Reserves Rise to $48.45 Billion
Despite the pressure on the naira, Nigeria's external reserves posted another gain. Latest figures from the CBN showed that the country's foreign reserves rose to $48.45 billion, up from $48.36 billion recorded on May 11, 2026. The increase comes amid ongoing uncertainties in the global commodity market, particularly rising tensions in the Middle East, which have pushed crude oil prices above Nigeria's 2026 budget benchmark.
As one of Africa's leading oil-producing nations, Nigeria is expected to benefit from stronger crude prices, which could improve FX inflows and support reserve growth, according to a report by MarketForces Africa.
Nigeria Nears Full OPEC Production Target
Further boosting optimism, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria achieved 99.2 percent of its Organisation of the Petroleum Exporting Countries (OPEC) crude oil production quota in April 2026. According to the commission, crude oil output rose to 1.48 million barrels per day, while condensate production stood at 174,873 barrels per day, bringing total daily production to 1.66 million barrels.
The agency noted that this represents a 7.58 percent increase compared to March, with peak production reaching 1.85 million barrels per day. The stronger oil output is expected to improve dollar inflows into the economy and could offer temporary relief for the naira if production momentum is sustained.
Naira Falls as Dollar Demand Surges
Legit.ng earlier reported that the naira slipped further against the US dollar on Tuesday, May 5, 2026, as rising demand for foreign payments and slower interventions by the Central Bank of Nigeria increased pressure on the local currency. Commercial banks, including Access Bank, United Bank for Africa, and Zenith Bank, quoted higher foreign exchange rates for customers amid volatility in the Nigerian Foreign Exchange Market. At the official market, the naira closed at N1,366.56 per dollar, slightly weaker than the N1,365.25/$ recorded the previous trading day, according to the CBN's daily foreign exchange report.
