The Nigerian naira recorded a modest but steady appreciation against the U.S. dollar in the second trading week of 2026, closing at N1,424.5/$ on Friday. This reflects the improving fundamentals of the foreign exchange (FX) market and heightened confidence in Nigeria’s external position, according to trading data from the Central Bank of Nigeria (CBN).
Steady Market Dynamics
The naira strengthened compared to the previous week’s N1,431/$, indicating relative stability in the FX market. When compared to January 2025, when the currency stood at N1,544.5/$, this week’s performance marks a positive trend.
Throughout the week, there was limited volatility, with the naira quoted at N1,428/$ on Monday, N1,416/$ on Tuesday, and maintaining a range of N1,421/$ on Wednesday and Thursday before closing the week stronger. Analysts describe this as a mild, yet positive appreciation, signaling reduced pressure on the FX market as the year progresses.
Optimism in Nigeria’s External Position
A slight increase in Nigeria’s foreign exchange reserves to $45.62 billion, up from $45.60 billion, provided support to the naira. The CBN’s positive outlook for 2026 projects external reserves could rise to $51.04 billion, backed by improved oil earnings, expected sovereign bond issuances, and increased remittances from Nigerians in the diaspora.
Experts also highlighted the potential benefits from Nigeria’s growing domestic refining capacity, which could reduce the need for imported petroleum products, thus easing pressure on foreign exchange.
A stronger naira aids in controlling imported inflation, bolstering investor confidence, and contributing to broader macroeconomic stability. Rising reserves give the CBN more leverage to manage FX volatility, while improved oil earnings and capital inflows fortify Nigeria’s balance of payments.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), remains optimistic about the naira’s outlook for 2026, citing strong external reserves and the potential benefits of continued FX market reforms.
