Three things stood out in Nigeria’s FX market last week.

The naira remained around ₦1,330 to the dollar, but underneath that stability, trading activity picked up sharply and Nigeria’s foreign exchange position continued to strengthen.

Here’s what mattered.

The dollar changed hands more often, without moving the rate much

The naira started the week at about ₦1,331.50/$ and remained within a narrow range before closing around ₦1,328–₦1,329/$ by Friday.

The interesting part was what happened behind the exchange rate.

On September 30, interbank FX turnover jumped 123% to $179.58 million, from $80.58 million the previous day. The number of deals also increased from 94 to 126.

So, more dollars were changing hands between banks, but the price of the dollar barely moved.

That is usually a useful sign for businesses watching FX liquidity. It suggests that increased trading activity did not translate into significant pressure on the naira during the session.

And this is important because a stable exchange rate does not necessarily mean a quiet market. Sometimes, stability means there is enough buying and selling activity to absorb transactions without forcing the price sharply in either direction.

Nigeria entered October with a much bigger FX cushion

Nigeria’s external reserves continued to build through September.

By September 24, reserves had reached approximately $54.86 billion, up from about $45.57 billion at the beginning of the year. That represents a gain of about $9.29 billion, or 20.4%, in the first nine months of 2026.

The reserve position had also crossed $55 billion earlier in September, reaching an 18-year high, according to reports citing CBN data.

Why does this matter for the naira?

Foreign reserves provide an important external buffer. A stronger reserve position gives the economy more room to meet foreign-currency obligations and helps improve confidence around the FX market.

It does not automatically mean the naira will appreciate. But when reserves are rising while the official exchange rate is also relatively stable, it creates a much stronger backdrop for the currency than periods when dollar liquidity is under pressure.

The CBN cut rates, but the naira stayed calm

There was another major development in the background: the CBN reduced its Monetary Policy Rate from 26.5% to 23%, a 350-basis-point cut.

Ordinarily, lower interest rates can reduce the attraction of naira-denominated assets. But the naira did not experience a major sell-off after the decision.

That tells us something about what is currently driving the FX market.

The naira’s recent stability is not being explained by interest rates alone. Stronger external reserves, improving FX liquidity and reduced pressure in the official market are also becoming important parts of the story.

What does this mean for businesses?

For companies buying dollars, making international payments or pricing products in both naira and foreign currency, last week was relatively straightforward.

The dollar remained close to ₦1,330, while the official market absorbed higher levels of interbank activity without a significant exchange-rate swing.

That makes the current environment easier to plan around.

But there is an important distinction: stable does not mean risk-free.

The naira has moved considerably over the course of 2026, and FX demand can change quickly when import payments, portfolio flows or external conditions shift.

For now, though, the story is one of stability backed by a stronger FX position.

The question going into October is whether that stability can continue as demand for dollars picks up and the market adjusts to the CBN’s lower interest-rate environment.

Disclaimer: This content is for informational and educational purposes only and should not be considered financial advice

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