Naira Continues Depreciation Against US Dollar Amid Rising External Reserves

The Nigerian Naira faced renewed downward pressure at the start of the trading week, recording losses against the United States dollar across both official and parallel market segments. According to data reported by Daily Post Nigeria on October 26, 2026, the currency’s value continued to slide as market activities resumed on Monday.

Official Market Performance

Data provided by the Central Bank of Nigeria (CBN) indicates that the Naira weakened in the official foreign exchange market. The currency closed at N1,367.61 per dollar, representing a depreciation of N5.77 from the N1,361.84 rate recorded at the close of the previous trading session on Friday. This shift follows a period of volatility observed late last week, during which the currency lost N22.12 per dollar between Thursday and Friday.

Parallel Market Trends

The trend of depreciation was mirrored in the parallel market, where the Naira saw a more pronounced decline. Reports indicate that the currency weakened by N10, moving from N1,375 per dollar at the end of the previous week to N1,385 per dollar on Monday.

Contextualizing the Market Movement

The recent decline in the value of the Naira occurs against a backdrop of increasing national external reserves. As of Friday, the country’s external reserves were reported to have reached $55.18 billion. Typically, an increase in external reserves is associated with greater capacity to support a currency; however, the current market data shows that the Naira has continued to lose value despite this rise in reserves.

Factors Influencing Exchange Rates

While the provided data highlights the current exchange rates, specific reasons for the divergence between rising reserves and the weakening Naira remain unaddressed by the current reports. Market participants often look to a variety of factors when assessing currency fluctuations, including:

• Demand for foreign currency by importers and businesses.
• General macroeconomic stability and inflation trends.
• Global economic conditions affecting emerging market currencies.

Daily Post Nigeria has not provided further analysis regarding the specific triggers for this week’s downward movement, nor has it offered projections on future market stabilization.

Conclusion

The Naira’s performance on October 26, 2026, underscores the ongoing volatility within the Nigerian foreign exchange landscape. As the currency continues to lose ground in both the official and parallel markets, stakeholders will likely monitor future CBN data to determine if this trend persists or if the accumulation of external reserves will eventually exert a stabilizing influence on the exchange rate.

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p class=”vbna-source-note”>Source: Daily Post Nigeria

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