Naira Records Sharpest Daily Decline in 18 Months, Weakens to N1,365/$

The naira depreciated sharply against the US dollar on Thursday, October 22, 2026, losing N28 to close at N1,365/$, its steepest single-day decline in approximately 18 months.

Data from the Central Bank of Nigeria (CBN) showed that the local currency weakened from N1,337/$ recorded on Wednesday, October 21, representing a depreciation of about 2.1 per cent in one trading session.

The latest decline marked the naira’s largest single-day fall in the official closing exchange rate since April 9, 2025, when it depreciated by N29 to close at N1,644/$ from N1,615/$.

The depreciation reversed the relative stability recorded earlier in the week, as the currency had closed at N1,334.99/$ on October 20 before weakening slightly to N1,337/$ the following day.

During Thursday’s trading session, the exchange rate fluctuated between an intraday low of N1,336/$ and a high of N1,369/$. The weighted average exchange rate rose to N1,344.40/$ from N1,334.72/$ recorded in the previous session, while the simple average increased to N1,344.66/$ from N1,335.41/$.

Interbank transactions recorded 181 deals, with reported turnover of approximately N316.55 million.

The latest movement contrasts with the relatively narrow fluctuations recorded earlier in October, when the naira traded largely within the N1,330–N1,340/$ range.

The depreciation comes amid sustained foreign exchange demand and changing investment flows in the Nigerian economy.

Data from the Financial Markets Dealers Association, as analysed by Nairametrics, indicated that Nigeria’s foreign exchange demand reached a 15-year high of $18.34 billion in the second quarter of 2026, reflecting increased demand for dollars, particularly for services and financial payments.

Meanwhile, Nigeria’s portfolio investment rose by 45 per cent to $6.51 billion during the same quarter, pointing to stronger investment flows into the country.

The country’s external reserves have also recorded significant growth, increasing by $12.76 billion year-on-year to $54.61 billion as of September 14, 2026.

The reserve position exceeded the CBN’s earlier projected year-end 2026 level of approximately $51.04 billion, providing additional capacity to meet external obligations and support confidence in the foreign exchange market.

However, the combination of elevated foreign exchange demand and movements in investment flows continues to shape the outlook for the naira.

Although stronger external reserves could provide a buffer against foreign exchange pressures, the latest depreciation underscores the potential for renewed volatility in the currency market.

The specific factors responsible for Thursday’s sharp decline were not established by the daily exchange-rate data alone.