Naira gives back 42% of Q3 gains as dollar hits N1,346, reserves hit $46B

The naira weakened to N1,346/$ on October 30, reversing about 42% of the gains it made between July and September, according to Nigerian Foreign Exchange Market (NFEM) data. The currency had strengthened from N1,369/$ on July 1 to N1,329.50/$ by September 30 — a 2.88% appreciation — but lost N16.50 in October alone, a 1.05% monthly decline. October trading was volatile: the naira firmed to N1,329.50/$ by October 19, then slipped to N1,370/$ on October 23 before recovering to close the month at N1,346/$.

Despite the pullback, the naira remains stronger than its July level. Meanwhile, Nigeria's net foreign exchange reserves climbed to a record $46 billion in October, up $11 billion from $34.8 billion at end-2025. The World Bank also raised its 2026 growth forecast to 4.3% (from 4.0% in 2025) and projects 4.4% expansion in 2027 and 2028.

Higher reserves typically boost FX market confidence, but they didn't prevent October's depreciation. For anyone holding dollar-denominated obligations — school fees, import costs, travel budgets — the rate sitting above N1,340 means continued pressure. Importers and businesses pricing in dollars should factor in volatility rather than assume the Q3 trend will resume.

With reserves at a record high but the naira still slipping, will the CBN intervene to defend the N1,350 level, or let market forces determine the rate through year-end?

SOURCE: https://nairametrics.com/2026/10/31/naira-reverses-3-month-gains-closes-october-at-n1346/