Naira strengthens for third session after sharp October 23 depreciation

The naira strengthened against the US dollar for a third consecutive trading session on Wednesday, October 28, 2026, closing at N1,349/$ at the Nigerian Foreign Exchange Market (NFEM), compared with N1,357/$ on Tuesday.

Data from the Central Bank of Nigeria’s (CBN) website showed that the currency gained N8 against the dollar during the session, extending its recovery after the sharp depreciation recorded on October 23, when it closed at N1,370/$.

The latest appreciation comes as Nigeria’s foreign reserves have crossed $55 billion, while movements in global currency markets continue to shape the outlook for the US dollar.

The naira’s latest gain followed improvements recorded on Monday and Tuesday, when it closed at N1,365/$ and N1,357/$, respectively.

The recovery follows a volatile session on October 23, when the naira traded as high as N1,395/$ and as low as N1,340/$ before closing at N1,370/$.

Since then, the currency has strengthened by N21 against the dollar, bringing it closer to the levels recorded before the October 23 depreciation.

Nigeria’s external reserves have crossed $55 billion, reaching their highest level in more than 18 years, according to the Central Bank of Nigeria, as previously reported by Nairametrics.

The latest reserve position has also surpassed the CBN’s earlier projection of approximately $51.04 billion for the end of 2026.

Foreign reserves provide a buffer for meeting external obligations and can support confidence in a country’s ability to meet foreign currency demand. However, the increase in reserves alone does not establish the direct cause of the naira’s recent appreciation.

The currency’s performance will also depend on dollar supply, demand from importers and other market participants, and the flow of foreign exchange into the Nigerian economy.

Developments in international currency markets may also influence demand for the US dollar and movements in other currencies.

The dollar steadied on Thursday after the US Federal Reserve held interest rates as expected, while signalling that upcoming inflation data would influence future policy decisions.

The Bank of Canada also raised its policy rate for the first time in more than three years, citing concerns that higher energy costs could fuel inflation.

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