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The naira strengthened to a five-month high on Monday, August 17, 2026, as increased activity in the foreign exchange market coincided with the Central Bank of Nigeria’s latest policy adjustment affecting banks’ access to its Standing Lending Facility (SLF), as reported by Legit.

The local currency appreciated by N8.07 against the US dollar, with the dollar quoted at N1,349.54 at the Nigerian Foreign Exchange Market (NFEM), compared with N1,357.61 on Friday. The movement represents a 0.59 per cent gain for the naira.

The latest exchange rate marks the strongest level recorded by the naira since April 22, 2026, when the dollar traded at N1,348.45 in the official market.

The CBN recently removed restrictions that had prevented banks from accessing its SLF, also known as the discount window, after participating in foreign exchange transactions and primary auctions of government securities.

The policy change is expected to improve banks’ access to liquidity and strengthen the transmission of monetary policy across the financial system. FX turnover jumps 266 per cent Trading activity also surged sharply on Monday, underscoring increased liquidity and participation in the interbank FX market.

The number of deals rose by 29.93 per cent to 178 from 137 recorded on Friday, while total turnover jumped 265.86 per cent to $437.53 million. Monday’s turnover was the highest recorded since July 22, when the market registered significant trading activity. It also represented a sharp increase from the $119.59 million recorded on Friday.

At the parallel market, the naira also gained ground, strengthening to N1,410 per dollar from N1,420 last week. The improvement narrowed the gap between the official and parallel market rates to 4.48 per cent on Monday, from 4.64 per cent on Friday.

The narrowing spread suggests that exchange-rate movements across the two markets are becoming more closely aligned, although a significant difference remains.

Rising reserves strengthen CBN’s position

The naira’s latest gains are coming against the backdrop of stronger external reserves, which provide the CBN with additional capacity to manage foreign exchange liquidity and meet the country’s international obligations.

Nigeria’s external reserves rose to $52.25 billion as of August 13, 2026, their highest level in 17 years. The latest figure represents a 28.32 per cent increase from the $40.72 billion recorded during the corresponding period of 2025, according to a report by BusinessDay.