Nigeria’s naira recorded its strongest daily gain since August 17 on Tuesday, October 27, appreciating by ₦8 to close at ₦1,357 per US dollar at the official foreign exchange market. Data from the Central Bank of Nigeria (CBN) showed that the currency had closed at ₦1,365 on Monday, as foreign exchange demand continued to shape market movements.
The ₦8 improvement represents the naira’s strongest daily gain in more than two months, offering some relief after a period of exchange-rate volatility in the second half of October.
During Tuesday’s trading session, the exchange rate moved between ₦1,344 and ₦1,368.50 per dollar. The weighted average rate stood at ₦1,352.87, reflecting the rates recorded across transactions during the session.
The latest movement follows a series of fluctuations that saw the naira weaken against the dollar before recovering some ground.
Official market records ₦543.74 million in turnover
Trading activity at the Nigerian Foreign Exchange Market (NFEM) showed that 197 interbank transactions were completed on Tuesday, with a combined turnover of approximately ₦543.74 million.
The session recorded a simple average exchange rate of ₦1,355.83 per dollar, while the lowest rate was ₦1,344 and the highest reached ₦1,368.50.
The difference between the session’s high and low rates highlights the movement in exchange prices during the trading day, even as the currency finished stronger than it had on Monday.
The naira’s latest appreciation also reversed part of its recent decline. The currency closed at ₦1,337 per dollar on October 21 before weakening to ₦1,365 on October 22 and ₦1,370 on October 23. It subsequently recovered to ₦1,365 on October 26 before recording Tuesday’s larger gain.
Biggest daily appreciation since August
The scale of Tuesday’s improvement was last matched in August, according to figures reported by Nairametrics.
On August 17, the naira gained ₦8.25 against the dollar, moving from ₦1,358.25 on August 14 to close at ₦1,350 per dollar.
Tuesday’s ₦8 appreciation therefore represents the currency’s largest daily gain since that session.
However, the latest recovery does not erase the volatility recorded during October. Exchange-rate movements over the period show that the naira has alternated between gains and losses rather than following a consistent upward trend.
Parallel market rate remains above official level
The naira also traded at stronger levels in the parallel market compared with Monday, although the informal market continued to quote the dollar at a higher price than the official market.
Bureau de Change (BDC) operators in Abuja quoted the dollar between ₦1,380 and ₦1,385 on Tuesday. The currency had traded at around ₦1,385 per dollar in the same market on Monday.
Based on these reported rates, the parallel-market dollar remained approximately ₦23 to ₦28 more expensive than the official closing rate of ₦1,357.
The difference illustrates the continued gap between the two markets, despite the naira’s improvement at both ends.
BDC operator Adamu Isha’q attributed movements in the informal market to changes in dollar availability and customer demand.
“Demand and supply determine the rate we give customers. When dollar demand is high, and supply is limited, the rate goes up. If more dollars are available and demand eases, the rate can come down,” he said.
His explanation points to the importance of foreign currency supply in determining the rates offered to customers in the parallel market.
Foreign reserves exceed $55 billion
Nigeria’s foreign exchange reserves have also remained an important factor in the country’s external financial position.
According to figures previously reported by Nairametrics, the reserves crossed $55 billion, reaching their highest level in more than 18 years. The reported level also exceeded the CBN’s earlier projection of approximately $51.04 billion by the end of 2026.
Foreign reserves provide a buffer that can support a country’s ability to meet external payment obligations and manage periods of pressure on its currency. However, a higher reserve balance does not automatically guarantee sustained appreciation of the naira.
The exchange rate also depends on how much foreign currency enters the market, the demand for dollars from businesses and individuals, and the availability of dollars through different channels.
Consequently, the naira’s recent gains will need to be assessed alongside broader foreign exchange conditions rather than through a single day’s closing rate.
Foreign exchange demand remains a major pressure point
Nigeria’s demand for foreign currency has increased significantly, according to figures cited in the report.
Total foreign exchange utilisation rose by 91.1% to $50.93 billion in 2025, marking its highest annual level since 2019.
Invisible transactions accounted for $30.99 billion of that total, while imports accounted for $19.94 billion. Invisible transactions include payments for services and other non-goods activities, although the supplied figures do not provide a further breakdown of the categories involved.
The scale of foreign exchange utilisation highlights the competing demands on available dollars. Even when reserves are strong, sustained demand for foreign currency can influence market rates and limit how far the naira strengthens.
For importers, businesses making international payments and individuals who need dollars for overseas expenses, the difference between official and parallel-market rates remains particularly relevant.
What the naira’s latest gain means
The naira’s rise to ₦1,357 per dollar is a positive daily movement, but it is too early to determine from this session alone whether the currency is entering a sustained period of appreciation.
The improvement follows several days of changing exchange rates and comes amid a foreign exchange environment shaped by both supply and demand.
A more durable recovery would depend on whether the naira can maintain its gains, whether dollar availability improves and whether pressure from foreign currency demand eases.
For now, the latest data show that the naira has recorded its strongest daily appreciation since August, while the gap between official and parallel-market rates and the country’s high foreign exchange utilisation remain important parts of the broader picture.
Source: Nairametrics