Naira strengthens as exchange rate gap narrows across FX markets

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By Boluwatife Oshadiya | July 6, 2026

Key Points

• The naira appreciated in both the official and parallel foreign exchange markets, narrowing the exchange rate gap to ₦20 per dollar
• Nigeria’s external reserves climbed to $51.46 billion, supported by stronger FX inflows and reduced intervention by the Central Bank of Nigeria
• Analysts expect improved FX liquidity and reserve growth to support exchange rate stability in the near term

Main Story

The Nigerian naira posted gains across the official and parallel foreign exchange markets last week, narrowing the gap between both segments as improved dollar liquidity and easing demand for foreign currency supported the local currency.

At the official market, the naira appreciated to ₦1,370 per US dollar, up from ₦1,380 recorded the previous week. The parallel market also strengthened, with the exchange rate improving to ₦1,390 per dollar, representing a ₦15 week-on-week gain. As a result, the spread between the official and informal markets narrowed to ₦20 per dollar, down from ₦25, reflecting continued convergence in exchange rates.

The improved performance comes amid sustained foreign exchange inflows into the official market from foreign portfolio investors, exporters, non-bank corporates and other market participants. The stronger FX supply has helped reduce pressure on the domestic currency while improving liquidity across the market.

Data from the Central Bank of Nigeria (CBN) also showed that the country’s gross external reserves rose to $51.46 billion at the end of the week, extending recent gains driven by inflows from multiple foreign exchange sources and relatively lower intervention in the FX market.

Meanwhile, developments in the global commodities market remained mixed. Brent crude traded around $71 per barrel

, while West Texas Intermediate (WTI) crude closed at $67 per barrel amid easing geopolitical tensions following continued negotiations between the United States and Iran. Precious metals, including gold, silver and platinum, advanced on expectations of potential U.S. Federal Reserve rate cuts, while industrial metals recorded mixed performance.

What’s Being Said

“Market dynamics remain supportive of the naira, with stronger external reserves and improving foreign exchange inflows helping to sustain liquidity at the official window,” market analysts at MarketForces Africa said in a market update.

Analysts added that the narrowing gap between the official and parallel markets reflects improving confidence in Nigeria’s foreign exchange reforms, although exchange rate stability will depend on sustained FX inflows and prudent monetary management.

What’s Next

• Investors will monitor the Central Bank of Nigeria’s foreign exchange management strategy and the pace of official market interventions.
• Market participants will watch external reserve levels and foreign portfolio inflows for further signs of improving FX liquidity.
• Global oil prices and international capital flows are expected to remain key drivers of the naira’s performance in the coming weeks.

Bottom Line: The narrowing exchange rate gap signals continued improvement in Nigeria’s foreign exchange market as stronger FX inflows and rising external reserves support the naira. Sustaining this convergence, however, will depend on maintaining investor confidence, healthy reserve accretion and stable foreign currency supply.