A N28 drop on Thursday ended weeks of calm trading and raised fresh questions about dollar demand.
The naira lost N28 against the US dollar on Thursday, 22 October, closing the session at N1,365/$. It was the currency’s sharpest single-day decline since April 2025.
Central Bank of Nigeria (CBN) data shows the local unit slipped from N1,337/$ the previous day, a fall of roughly 2.1% in one session. The last comparable move was on 9 April 2025, when the naira shed N29, going from N1,615/$ to N1,644/$.
A break from a quiet month
The drop stands out because October had been fairly uneventful for the currency. For most of the month the naira traded within a N1,330 to N1,340 band, closing at N1,334.99/$ on 20 October and N1,337/$ on 21 October.
On Thursday the rate swung between N1,336/$ and N1,369/$ during the session. The weighted average rate rose to N1,344.40/$ from N1,334.72/$, while the simple average climbed to N1,344.66/$ from N1,335.41/$. The market recorded 181 interbank deals worth about N316.55 million.
Demand pressure in the background
Recent data points to heavy appetite for dollars. Figures from the Financial Markets Dealers Association, analysed by Nairametrics, show that FX demand reached a 15-year high of $18.34 billion in the second quarter of 2026, driven mainly by services and financial payments.
External buffers, however, remain strong. Foreign exchange reserves stood at $54.61 billion as of 14 September, up $12.76 billion year-on-year and above the CBN’s year-end projection of about $51.04 billion. Portfolio investment inflows also rose 45% to $6.51 billion in the second quarter.
What drove Thursday’s move?
The available data does not point to a single cause for the day’s slide. Whether it marks the start of a sustained weakening or a one-off adjustment will become clearer in the coming sessions, as traders watch dollar demand and portfolio flows.
