Introduction

The Nigerian naira continued its recovery trajectory on Wednesday, October 28, 2026, extending gains for a third consecutive trading session amid shifting global currency dynamics and a significant milestone in the nation's external reserves.

What Happened

On the day, the naira closed at N1,349 per dollar at the Nigerian Foreign Exchange Market, up N8 from the previous session's N1,357/$. Trading ranged between a high of N1,363.50/$ and a low of N1,342/$, with the weighted average settling at N1,347.53/$ and the simple average at N1,349.29/$. The interbank foreign exchange turnover slowed to US$244.61 million from US$543.74 million the prior day. The latest bounce-back follows two prior gains on Monday and Tuesday, when the currency closed at N1,365/$ and N1,357/$, respectively. Since a sharp depreciation on October 23, when it settled at N1,370/$, the naira has recovered N21, moving closer to pre-depreciation levels.

Why This Matters

A notable milestone unfolded as Nigeria's external reserves surpassed $55 billion, reaching their highest point in more than 18 years and exceeding the Central Bank's earlier projection of approximately $51.04 billion by year-end 2026. The reserve build-up provides a buffer for meeting external obligations and can bolster market confidence - dollar supply, importer demand, and broader foreign exchange inflows remain key determinants. On the global stage, developments continued to shape the dollar's trajectory: the U.S. Federal Reserve held interest rates as expected, keeping the dollar steady, while other major currencies recorded mixed movements, and the Bank of Canada lifted its policy rate for the first time in over three years amid concerns over energy-driven inflation pressures.

Key Takeaways

  • The naira strengthened for a third straight session, closing at N1,349/$ after gaining N8, with trading ranging from N1,342 to N1,363.50/$.
  • Nigeria's external reserves crossed $55 billion, their highest level in nearly two decades, though reserve growth does not guarantee direct currency impact.
  • Tuesday's N8 gain marked the biggest daily appreciation since August.
  • Trading activity slowed, with interbank turnover dropping to $244.61 million.
  • Global central bank decisions, including the Fed's hold and the Bank of Canada's rate hike, underscore the broader monetary environment influencing forex dynamics.
  • Market participants should monitor dollar supply, importer demand, and upcoming inflation data for clues on the currency's next move.

Conclusion

The naira's third consecutive gain highlights a tentative recovery phase for Nigeria's foreign exchange market, supported by rising reserve levels and shifting global monetary signals. As reserve milestones and central bank policies continue to unfold, market participants should monitor dollar supply, importer demand, and upcoming inflation data for clues on the currency's next move.