Naira ends May 2026 stable at N1,372/$1 as FX reforms drive annual 13.5% gain

The Nigerian naira closed the month of May 2026 at N1,372 to the US dollar, reflecting a largely stable performance in the foreign exchange market despite mild fluctuations during the period.

Data from the Central Bank of Nigeria showed that the currency recorded a slight monthly depreciation of 0.36 percent compared to the end of April 2026, when it closed at N1,367/$1.

However, on a year-on-year basis, the naira posted a significant appreciation, strengthening from N1,585.50/$1 recorded at the end of May 2025 to N1,372/$1 in May 2026. This represents a gain of N213.50 or about 13.5 percent against the US dollar.

The performance indicates improved stability in Nigeria’s foreign exchange market, supported by ongoing monetary reforms, improved FX liquidity, and increased investor confidence in recent months.

Throughout May, the naira traded within a relatively narrow band, opening at N1,367.50/$1 and strengthening briefly to N1,358.01/$1 on May 7, its strongest level during the month.

It later fluctuated between N1,372/$1 and N1,375/$1 before closing at N1,372/$1 on May 29. The market was closed on May 27 and May 28 due to the Eid-el-Kabir public holidays.

Analysts note that the tight trading range reflects a period of consolidation in the foreign exchange market after months of volatility, suggesting improved balance between FX demand and supply.

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The naira’s steady performance in May also extended gains recorded in April 2026, when it appreciated from N1,387/$1 at the end of March to N1,374/$1 by month-end, marking one of the first sustained monthly improvements since 2024.

Market data indicates that Nigeria’s external reserves also recorded modest improvement during the period, helping to support liquidity in the foreign exchange market and reinforce exchange rate stability.

Financial market participants attribute the improved outlook to stronger FX inflows, sustained policy reforms, and growing confidence in the broader macroeconomic environment.

The Central Bank maintained a tight monetary stance during its May Monetary Policy Committee meeting, keeping key rates unchanged to further anchor inflation expectations and support currency stability.

The Monetary Policy Rate (MPR) was retained at 26.5 percent, while the Cash Reserve Ratio (CRR) for commercial banks remained at 45 percent and 16 percent for merchant banks. The asymmetric corridor around the MPR was also maintained at +500/-100 basis points.

According to the apex bank, the decision was aimed at consolidating gains in inflation control and sustaining stability in the foreign exchange market.

The relatively stable performance of the naira over two consecutive months has raised cautious optimism among market observers that exchange rate volatility may be easing as reforms continue to take effect.