Naira Exchange Rate Falls to N1,365/$: Sharpest Daily Drop in 18 Months as FX Demand Stays High

The naira exchange rate took its biggest one-day hit in a year and a half on Thursday. Central Bank of Nigeria (CBN) data, analysed by Nairametrics, show the naira closed at N1,365 to the US dollar on 22 October, down N28 from N1,337/$ the day before. That is a depreciation of about 2.1%.

It was the sharpest single-day fall since 9 April 2025, when the naira lost N29 in one session, sliding from N1,615/$ to N1,644/$. Earlier in October the currency had mostly traded in a tight band between N1,330 and N1,340/$.

Naira exchange rate: Thursday's numbers

• Closing rate, 22 October: N1,365/$
• Previous close, 21 October: N1,337/$
• Close on 20 October: N1,334.99/$
• Intraday range: N1,336/$ to N1,369/$
• Weighted average rate: N1,344.40/$, up from N1,334.72/$
• Interbank activity: 181 deals, with reported turnover of about N316.55 million

The intraday range is the detail to note. The naira opened near its recent level, then weakened through the session to close close to the day's low. A close near the low often signals that demand for dollars was still unmet at the end of trading.

Why the naira weakened

Nairametrics analyst Olalekan Adigun was careful on cause. His report states that "the latest daily depreciation alone does not establish the specific factors behind Thursday's movement". The backdrop, though, points to strong demand for dollars:

• Nigeria's foreign exchange demand hit a 15-year high of $18.34 billion in the second quarter of 2026, driven by payments for services and financial transactions.
• Portfolio investment rose 45% to $6.51 billion in the same quarter. Foreign portfolio money supports the naira when it arrives, but it can leave quickly when investors take profits or chase higher returns elsewhere.

Yields matter here. Nigerian bond yields have been rising, with the 10-year near 17%, as we noted in our report on the 10-year bond yield climbing to 17.05%. At the same time, US yields have drawn money toward dollar assets. That push and pull shapes how much foreign cash stays in naira markets.

Reserves are still a cushion

The fall comes with Nigeria's reserves in a much stronger position than in 2024 and early 2025. Gross foreign exchange reserves stood at $54.61 billion on 14 September 2026, up $12.76 billion from a year earlier, according to the figures cited by Nairametrics. That is above the CBN's own projection of about $51.04 billion for the end of 2026.

Large reserves give the CBN room to supply dollars to the market if it chooses to slow a slide. They do not guarantee it will, and the bank has generally preferred to let the official rate respond to demand since it unified Nigeria's exchange rate windows.

What it means for businesses and savers

• Importers: a N28 move in a day raises landed costs quickly. Firms paying for goods in dollars in the coming weeks may want to secure part of their needs early or use forward contracts where available.
• Exporters and dollar earners: a weaker naira raises the local value of foreign receipts.
• Savers and investors: one bad day is not a trend. The naira spent most of October in a narrow range. The question is whether N1,365/$ becomes a new floor or a brief spike that reverses as dollar supply catches up.
• Inflation watchers: a sustained weaker naira feeds into fuel, food and import prices with a lag of a few weeks.

What to watch next

Three signals will show whether this move sticks. First, the next few daily closes: a return toward the N1,330–N1,340 band would mark Thursday as an outlier. Second, any CBN intervention or open market operations to tighten naira liquidity, which the bank has used heavily this month. Third, foreign portfolio flows around bond and treasury bill auctions, since high yields remain the main pull for dollar inflows.

Market Pulse Africa will update its currency table as new official rates are published. This article is for information only and is not investment advice.