The naira closed the week stronger against the dollar at the Nigerian Foreign Exchange Market, a shift Olayemi Cardoso described as part of a broader transformation in the country’s FX trading.
Cardoso, citing reforms that have consolidated trading windows and improved transparency, said the shift was visible in the week’s prices and volumes.
The figure that proved the move mattered was the N13.55 week‑on‑week appreciation at the NFEM, where the dollar was quoted at N1,361.39 on Friday — a 0.99 percent gain from N1,374.94 the previous Friday. Weekly turnover at the NFEM reached $1.98 billion across 1,485 deals, with the interbank segment alone accounting for $571.72 million in 607 deals.
Those numbers came alongside mixed short‑term moves: the naira depreciated by N5.54 on Friday from N1,355.85 per dollar on Thursday, yet it still finished the five trading sessions N3.86 firmer from N1,365.25 on Monday. In the parallel market the rate closed at N1,395 per dollar on Friday, bringing the gap with the NFEM rate down to N34 from N45 on Thursday.
Market participants credited the weekly gain to improved liquidity and fresh foreign exchange inflows from foreign investors, exporters and oil companies, the precise forces the central bank has sought to encourage. The Central Bank of Nigeria’s 2024 introduction of the Enhanced Foreign Exchange Market System was designed to improve transparency, efficiency and price discovery — a framework Cardoso has pointed to repeatedly.
"Over the past year, we have sustained the unification of the multiple exchange‑rate windows," Cardoso said, adding that the reforms aim to foster "transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations." She also said the transformation of the foreign exchange market was one of the clearest signs of renewed confidence in Nigeria’s economy.
The confidence claim faces immediate tests in two places. First, Nigeria’s gross external reserves declined by 3.39 percent to $48.32 billion as of May 7, 2026, down from $50.02 billion on March 11, 2026. Second, short‑run volatility persisted: Coronation Merchant Bank’s analysts noted that in the prior week the naira had weakened by 1.20 percent at the NFEM window, and that the parallel market had lingered at N1,400 per dollar then.
Those facts produce a tension between a market that shows clearer price discovery and higher turnover and a balance sheet that is shrinking. The NFEM’s $1.98 billion weekly turnover and the $571.72 million routed through the interbank segment underline deeper trading activity; at the same time, a falling reserves position and day‑to‑day swings in quoted rates signal vulnerability to shocks or sudden stops in inflows.
For businesses and investors the immediate question is whether the liquidity that supported the week’s gains can be sustained. If foreign investors and exporters continue to supply FX and oil companies remit receipts on schedule, the official‑parallel gap may narrow further and the NFEM rates could hold. If not, intermittent depreciations like the N5.54 slide on Friday could reassert themselves quickly.
Putting the week together, the most defensible reading is this: the naira’s improvement reflects tangible changes in how FX trades in Nigeria and meaningful flows into the market, but those gains remain conditioned on the same external and domestic balances that have constrained Nigeria’s reserves. Cardoso’s assertion that market transformation signals renewed confidence is supported by volumes and tighter spreads; the test now is whether that confidence endures long enough to rebuild buffers and dampen the swings that still show up in daily quotes.
