The naira depreciated by N28 against the US dollar to close at N1,365/$ on October 22, 2026, marking its sharpest single-day decline since April 2025.
Data from the Central Bank of Nigeria (CBN) showed the exchange rate weakened from N1,337/$ recorded on October 21, representing a depreciation of about 2.1% in one trading session.
Checks by Nairametrics revealed that the latest decline was the largest in the closing exchange rate since April 9, 2025, when the naira weakened by N29 from N1,615/$ to N1,644/$.
Naira reverses gains
The latest movement reversed the relatively narrow fluctuations recorded in the preceding sessions.
CBN data showed that the currency had closed at N1,334.99/$ on October 20 and N1,337/$ on October 21 before the latest depreciation.
- The exchange rate reached an intraday high of N1,369/$ on October 22, while the low was N1,336/$.
- The weighted average rate increased to N1,344.40/$ from N1,334.72/$ recorded on October 21.
- The simple average rate also rose to N1,344.66/$ from N1,335.41/$ in the previous session.
- Interbank transactions totalled 181 deals, while the reported interbank turnover stood at approximately N316.55 million.
The daily movement stands out against the more modest changes recorded earlier in October, when the naira traded largely within the N1,330–N1,340/$ range.
FX demand and portfolio flows shape market outlook
The depreciation comes amid significant demand for foreign exchange and continued movement in investment flows.
Nairametrics’ analysis of Financial Markets Dealers Association data showed that Nigeria’s foreign exchange demand reached a 15-year high of $18.34 billion in the second quarter of 2026, with demand for dollars rising particularly in services and financial payments.
- Nigeria’s portfolio investment rose by 45% to $6.51 billion in the second quarter of 2026, according to an earlier Nairametrics report.
- Foreign exchange reserves increased by $12.76 billion year-on-year to $54.61 billion as of September 14, 2026.
- The reserve level was above the CBN’s projected year-end 2026 level of approximately $51.04 billion, as reported by Nairametrics in December 2025.
These figures point to a market shaped by both foreign exchange demand and external liquidity. However, the latest daily depreciation alone does not establish the specific factors behind Thursday’s movement.
Reserves remain above CBN projection
Nigeria’s foreign exchange reserves provide a buffer for meeting external obligations and supporting confidence in the foreign exchange market.
- The reported increase to $54.61 billion by September 14 placed reserves above the CBN’s earlier year-end projection of $51.04 billion.
- At the same time, the record level of foreign exchange demand in the second quarter highlights the scale of dollar requirements across the economy.
Portfolio investment inflows also increased during the period, adding another dimension to the country’s external flows.