Official foreign-exchange liquidity improved as the naira firmed to ₦1,326.69, its strongest level in two years. The move followed a jump in dollar availability and a broader external buffer, reinforcing turnover in the official market and easing pressure on state-managed channels.
Nigeria’s external reserves expanded to $53.51 billion in August, the highest level since 2008, and official market turnover climbed to $14.68 billion in August, marking the most active five-month stretch noted in an FMDA report. Those aggregates coincide with a surge in remittances through formal channels, which the authorities have highlighted as central to the improvement in official FX supply.
International Money Transfer Operator inflows reached $947 million in July 2026, the largest monthly total recorded through formal channels and nearing the Central Bank of Nigeria governor’s $1 billion monthly objective. IMTO receipts totalled $3.8 billion in the first seven months of 2026, a 50.2 percent increase from the same period in 2025. The CBN’s policy changes, including tighter routing rules for remittance payments through designated settlement accounts with authorised dealer banks and the Non-Resident Bank Verification Number, have supported the shift to formal transfers.
Governor Olayemi Cardoso framed the progress as deliberate, saying, "When we set a clear ambition to reach $1 billion a month in remittance inflows through formal channels nearly two years ago, some people thought we were dreaming. At $947 million in July, we are now approaching that milestone." He added, "July is an important marker, but our focus is not on a single month. It is on creating the conditions for sustained growth in formal remittances. We expect to keep seeing improvement and believe Nigeria can reach and ultimately sustain monthly inflows above $1 billion."
Higher oil prices provided additional external support, with average Brent crude at $87.26 per barrel in August and episodic trading above $90 per barrel amid Middle East tensions. Domestically, system liquidity rose sharply, increasing by 56.17 percent to ₦4.65 trillion in August from ₦2.98 trillion in July, helped by maturing securities, FAAC allocations and repayments that offset liquidity mops.
Despite gains in the official market, a wider gap with the parallel market emerged in August. The naira strengthened 1.5 percent in the NFEM during the month versus a 0.06 percent movement in the parallel market, a divergence analysts link partly to pre-election dollar demand and the continued dollar pricing of some real estate transactions amid Capital Gains Tax uncertainty.
The immediate policy challenge is converting stronger dollar supply into durable naira appreciation while avoiding excess domestic liquidity that would threaten monetary stability. The official market’s runway now depends on sustaining remittance growth, managing system liquidity and containing structural dollar demand as political activity intensifies.
