The naira strengthened by N8 against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Tuesday, October 27, closing at N1,357/$ in its strongest daily appreciation since August.

Figures released by the Central Bank of Nigeria (CBN) showed that the local currency gained ground from Monday’s closing rate of N1,365/$, reversing part of its recent decline after weakening to N1,370/$ on October 23.

During Tuesday’s trading session, the exchange rate ranged between N1,344/$ and N1,368.50/$, while the weighted average rate settled at N1,352.87/$. The simple average rate stood at N1,355.83/$.

The latest gain was the naira’s largest single-day appreciation since August 17, when it advanced by N8.25, moving from N1,358.25/$ on August 14 to N1,350/$.

Trading activity at the interbank market recorded 197 transactions, with a combined turnover of approximately N543.74 million.

The appreciation followed a period of considerable fluctuations in the second half of October. The naira closed at N1,337/$ on October 21 before weakening to N1,365/$ the following day and N1,370/$ on October 23. It subsequently recovered to N1,365/$ on Monday, October 26, ahead of Tuesday’s further improvement.

Meanwhile, the currency continued to trade at a weaker rate in the parallel market, where Bureau De Change (BDC) operators in Abuja quoted the dollar between N1,380 and N1,385 on Tuesday. This represented a slight improvement from Monday’s rate of about N1,385/$.

The difference between the official and parallel-market rates persisted, reflecting varying foreign exchange supply and demand conditions across the two markets.

A BDC operator, Adamu Isha’q, attributed movements in the informal market to fluctuations in customer demand and dollar availability, explaining that limited supply amid strong demand typically pushes rates higher, while increased availability and reduced demand can ease the pressure.

In a related development, Nigeria’s foreign exchange reserves have risen above $55 billion, reaching their highest level in more than 18 years, according to the CBN. The reserve figure also exceeds the bank’s earlier projection of approximately $51.04 billion by the end of 2026.

The stronger reserve position provides the country with a larger external financial buffer. However, the naira’s performance remains influenced by prevailing foreign exchange supply and demand, alongside broader market conditions.

Nigeria’s foreign exchange market has also experienced increased utilisation in recent years. Total foreign exchange utilisation rose by 91.1 per cent to $50.93 billion in 2025, its highest annual level since 2019. Invisible transactions accounted for $30.99 billion, while imports represented $19.94 billion of the total.