The naira ended May 2026 at N1,372 per dollar, posting a marginal decline of 0.36 percent compared to the N1,367 recorded at the end of April.
Despite the slight monthly depreciation, the Nigerian currency maintained a significantly stronger position against the U.S. dollar compared to the same period last year.
Data from the Central Bank of Nigeria (CBN) showed that the naira gained N213.50 against the dollar on a year-on-year basis, appreciating by 13.5 percent from the N1,585.50/$ exchange rate recorded at the end of May 2025.
The performance reflects growing stability in the foreign exchange market amid ongoing monetary reforms, improved foreign exchange liquidity, and increasing investor confidence.
The latest figures also capped a relatively stable trading month for the naira, which remained within a narrow range despite global economic uncertainties and fluctuating demand pressures in the foreign exchange market.
Naira Maintains Stability Throughout May
Market data showed that the naira opened May at N1,367.50/$ before strengthening to N1,358.01/$ on May 7, its strongest level during the month.
For much of May, the currency traded within the N1,372/$ to N1,375/$ range before closing at N1,372/$ on May 29.
Compared to its position a year earlier, the naira appreciated by approximately N213.50 against the dollar, highlighting a significant improvement in exchange rate performance.
Trading activity was briefly interrupted during the month as financial markets remained closed on May 27 and May 28 for the Eid-el-Kabir public holidays.
Analysts note that the relatively narrow trading range suggests a period of consolidation in the foreign exchange market after several months of heightened volatility.
Consecutive Months of Improved Performance
The naira's performance in May followed gains recorded in April, when the currency appreciated from N1,387/$ at the end of March to N1,374/$ at month-end.
April was one of the first months since 2024 in which the naira closed stronger than it opened, and the currency successfully preserved most of those gains throughout May.
Nigeria's external reserves also improved during the period, providing additional support for exchange rate stability.
Market participants attribute the improved performance to stronger foreign exchange liquidity, ongoing policy reforms, and growing confidence in the foreign exchange market.
The ability of the naira to maintain relative stability over two consecutive months has strengthened expectations that exchange rate volatility may be moderating after an extended period of market turbulence.
CBN Maintains Tight Monetary Policy
The Central Bank of Nigeria maintained its tight monetary policy stance during the latest meeting of the Monetary Policy Committee (MPC) in May, a decision widely viewed as supportive of exchange rate stability.
The committee retained the Monetary Policy Rate (MPR) at 26.5 percent.
Other key monetary policy parameters were also left unchanged:
- Cash Reserve Ratio (CRR) for commercial banks remained at 45 percent.
- Cash Reserve Ratio for merchant banks was retained at 16 percent.
- The asymmetric corridor around the MPR was maintained at +500/-100 basis points.
According to the CBN, the decision was aimed at consolidating gains already recorded in inflation management and foreign exchange market stability.
The combination of tighter monetary conditions, improved liquidity, and growing investor confidence has contributed to the relative calm witnessed in the foreign exchange market in recent months, raising hopes that the naira may continue to trade within a more stable range in the near term.