Nigeria’s currency lost some of its recent strength in October, as a late-month decline wiped out about 42% of the gains it had made against the US dollar between July and September.
The naira closed at ₦1,346/$ on October 30, compared with ₦1,329.50/$ at the end of September, according to data from the Nigerian Foreign Exchange Market (NFEM). The ₦16.50 movement represents a depreciation of approximately 1.24% from its September closing rate.
Although the October setback reversed part of the currency’s third-quarter recovery, the naira still ended the month stronger than its July level of ₦1,369/$.
October’s late decline reverses earlier gains
The naira’s performance during October was uneven, with periods of recovery followed by renewed pressure.
After opening the month at ₦1,332/$ on October 2, the currency weakened to ₦1,332.99/$ on October 12 and ₦1,335.50/$ on October 13. It subsequently recovered to ₦1,329.50/$ on October 19 before slipping to ₦1,334.99/$ the following day.
The exchange rate then climbed to ₦1,370/$ on October 23, marking a significant deterioration from its earlier position. The naira recovered to ₦1,365/$ on October 26 and continued to strengthen, closing at ₦1,349/$ on October 28 and ₦1,346/$ on October 29 and 30.
The month-end rate was therefore higher than September’s closing figure, even though the currency recovered some ground after its October 23 decline.
Third-quarter appreciation partly wiped out
Before October’s depreciation, the naira had recorded a ₦39.50 appreciation between July 1 and September 30, moving from ₦1,369/$ to ₦1,329.50/$.
That represented a gain of approximately 2.88% over the three months. However, the subsequent ₦16.50 decline in October erased about 42% of that improvement.
The currency has consequently surrendered a sizeable portion of its recent recovery, although it has not returned to its July closing level.
Reserves reach $46 billion despite exchange-rate setback
The weaker October performance came as Nigeria’s external reserve position improved. The country's net foreign exchange reserves reportedly rose to a record $46 billion during the month.
The figure represents an increase of approximately $11 billion from the $34.80 billion recorded at the end of 2025.
Higher reserves can strengthen Nigeria’s capacity to meet external obligations and support confidence in the foreign exchange market. However, the rise in reserves does not, on its own, establish what drove the naira’s depreciation in October.
World Bank projects stronger economic growth
Nigeria’s broader economic outlook also improved during October, with the World Bank raising its 2026 growth forecast to 4.3%, from the 4.0% growth recorded in 2025.
The institution expects the economy to expand by 4.4% in both 2027 and 2028.
While the revised projection points to stronger expected economic activity, it does not necessarily mean the naira will appreciate. Exchange-rate performance remains a separate measure of market conditions.
The naira’s October reversal therefore presents a mixed picture: the currency remains above its July position, but the loss of part of its third-quarter gains highlights the fluctuations it experienced in the foreign exchange market during the month.
Source: Nairametrics