By Faith Eze
The Nigerian naira weakened slightly against the United States dollar in the official foreign exchange market, closing at N1,364.89 per dollar, compared with N1,360.14 recorded the previous trading day. The latest movement represents a 0.35 per cent decline in the value of the naira. The development was reported as foreign exchange trading activity fell sharply, attracting fresh attention to the condition of Nigeria’s currency market. Although the change in the exchange rate was relatively small, movements in the naira-dollar rate remain important because the value of the naira affects businesses, consumers, importers and other economic activities across the country.
One major feature of the latest development was the sharp reduction in foreign exchange trading. According to figures reported by The PUNCH, turnover at the interbank segment dropped from about $213.85 million to $29.06 million, representing an 86.41 per cent decline. The number of transactions also fell from 182 deals to 47 deals. This shows that there was considerably less trading activity during the period. However, lower daily trading volume does not necessarily mean that the foreign exchange market is facing a crisis, as trading levels can change because of demand, supply, timing of transactions and other market conditions.
Activity in the Nigerian Foreign Exchange Market also recorded a decline. NFEM turnover reportedly fell from $1.25 billion on Friday to $646.51 million on Monday. The NFEM is important because it is the official market through which foreign exchange transactions and exchange-rate information are recorded. The Central Bank of Nigeria continues to monitor developments in the market as it works toward improving foreign exchange liquidity and maintaining stability. The difference between the official exchange rate and the parallel-market rate also remains an important issue for businesses and individuals who need access to foreign currency.
While the naira weakened in the official market, the parallel-market rate was reported to remain around N1,425 per dollar. This means there was still a noticeable difference between the official and parallel rates. Such differences have historically created concerns about market efficiency and access to foreign exchange. Nigeria's foreign exchange reforms have focused on creating a more transparent and efficient market while reducing distortions. A more stable and predictable exchange-rate system is important because businesses need to plan their costs, especially companies that depend on imported goods, equipment and raw materials.
Another positive development is the increase in Nigeria's external reserves. The country's reserves reportedly rose to about $52.14 billion as of August 10, 2026, compared with $40.29 billion recorded in August 2025. Stronger foreign reserves are important because they provide the country with a financial buffer and can help strengthen confidence in the economy. The Central Bank of Nigeria has also increased its foreign exchange sales, with reported sales rising to about $1.4 billion in July from $320 million in June. The increase was linked to efforts to meet seasonal foreign exchange demand.
For ordinary Nigerians, the naira-dollar exchange rate is more than just a financial market figure. Changes in the exchange rate can affect the prices of imported goods, raw materials, electronics, vehicles and other products. Businesses that need dollars to pay foreign suppliers may face higher costs when the naira weakens. These costs can eventually be transferred to consumers through higher prices. The exchange rate can also affect Nigerians paying international school fees, medical bills, travel expenses and other dollar-related obligations. This is why many people closely follow daily movements in the naira.
Overall, the latest exchange-rate figures present a mixed picture for Nigeria. The naira weakened slightly to N1,364.89 per dollar, while foreign exchange trading activity dropped considerably. At the same time, the country's external reserves continued to improve and the Central Bank increased its foreign exchange sales to respond to demand. The future direction of the naira will depend on factors such as foreign exchange supply, oil earnings, capital inflows, investor confidence, monetary policy and global economic conditions. For Nigerians, the major hope is that the country's foreign exchange reforms and stronger reserves will eventually bring greater stability to the naira and make prices more predictable.
