Naira falls to N1,367.61 per dollar as currency extends decline

The Nigerian Naira experienced a continued decline against the United States dollar as foreign exchange trading resumed on Monday, October 26, 2026. According to data released by the Central Bank of Nigeria (CBN), the official exchange rate weakened to N1,367.61 per dollar. This represents a drop from the previous closing rate of N1,361.84 recorded at the end of trading on Friday, October 23.

The depreciation amounted to a loss of N5.77 per dollar at the official foreign exchange market compared to the previous week's close. The downward trend was not limited to the official sector; the parallel market also saw the Naira weaken. In the unofficial market, the currency fell by N10, reaching a rate of N1,385 per dollar, down from N1,375 recorded in the previous week. This simultaneous weakening across both market segments highlights persistent pressure on the currency despite recent developments in the country's financial reserves.

Background

The recent decline in the Naira's value follows a period of significant volatility in the foreign exchange markets. Reports indicate that the currency had already suffered a sharp drop from Thursday to Friday of the previous week, losing N22.12 per dollar during that two-day span. This prior loss set the stage for the further depreciation observed on Monday.

Notably, the recent weakening of the Naira occurred despite a positive development in Nigeria's external reserves. Data showed that the country's external reserves rose to $55.18 billion on Friday. Typically, an increase in foreign reserves can provide support to a currency by indicating a stronger capacity to meet external obligations and import needs. However, in this instance, the rise in reserves did not prevent the Naira from continuing its downward trajectory against the dollar.

The Central Bank of Nigeria serves as the primary source for the official exchange rate data, which is used for government transactions and regulated commercial activities. The parallel market rate, while not officially sanctioned, often reflects the true market sentiment and supply-demand dynamics for foreign currency among individuals and private businesses. The gap between the official rate of N1,367.61 and the parallel rate of N1,385 suggests a continued premium for dollars in the unofficial sector.

Why it matters

The continued depreciation of the Naira has direct implications for the Nigerian economy and its citizens. A weaker currency increases the cost of importing goods, which can lead to higher prices for essential items such as food, fuel, and pharmaceuticals. This inflationary pressure affects the purchasing power of consumers and the operational costs for businesses that rely on imported raw materials or finished products.

The fact that the Naira fell despite the increase in external reserves to $55.18 billion raises questions about the factors driving the currency's weakness. It suggests that market confidence and other economic variables may be exerting a stronger influence on the exchange rate than reserve levels alone. For investors and businesses, this volatility complicates financial planning and risk management. The disparity between the official and parallel market rates also indicates ongoing challenges in unifying the foreign exchange market, a goal that has been a focus of recent economic reforms in Nigeria.

What happens next

The sources do not provide specific information regarding upcoming policy decisions, scheduled interventions by the Central Bank, or future dates for exchange rate reviews. The next steps for the Naira's value will likely depend on broader economic indicators, global market trends, and any future announcements from the Central Bank of Nigeria regarding monetary policy or foreign exchange management strategies.