Naira Holds Near N1,331/$ as Record Reserves Steady the Currency

Nigeria's naira held near N1,331 per dollar as the new week began, with the currency trading inside the narrow band that has characterised the official market for much of October while foreign reserves provided a visible external buffer.

Market checks on Monday put the naira at about N1,331.62 per dollar, broadly consistent with the N1,330 to N1,335 range that has defined recent sessions at the Nigerian Foreign Exchange Market (NFEM). The currency had earlier touched N1,335.50 on October 13, its weakest close since August, before recovering toward N1,333.

Reserves at a 17-year high

Behind the currency's relative calm sits a substantial reserve cushion. Central Bank of Nigeria figures put gross foreign exchange reserves at $58.81 billion on October 12 — the highest level since November 2008 and well above the CBN's own projection of roughly $51 billion for the end of 2026.

Reserve accumulation has been driven by firmer oil receipts, portfolio inflows and a reduction in the central bank's foreign exchange liabilities, a mix that has also underpinned upgrades to Nigeria's growth and ratings outlook from international institutions.

Turnover swings beneath a stable headline rate

While the headline exchange rate has been quiet, daily NFEM turnover has swung sharply — from about $538 million in late September to over $1 billion on some early-October days, then lower again. That volatility in volume, rather than price, has been the more revealing signal of how demand and supply are matching in the market.

Analysts said the combination of record reserves and a tightly managed trading band has reduced parallel market premium concerns, but cautioned that the durability of stability depends on continued inflows and on the central bank's willingness to supply dollars into the window.

Outlook for the week

With inflation data, bond auctions and global gold and oil markets all in motion, the naira faces several potential catalysts this week. For now, the currency's position near N1,331 and the reserve buffer above $58 billion give the market a degree of calm that was harder to find earlier in the year.