Nigeria’s economy shows stronger resilience to global shocks, according to the Central Bank of Nigeria (CBN). The apex bank says recent reforms now support stability and steady growth.

CBN Governor Olayemi Cardoso said key economic indicators point to clear improvement. He noted that inflation is easing, while the foreign exchange market is becoming more stable. For more on policy direction, see our report on Nigeria’s economic reforms and policy updates.

Reforms Boost Nigeria Economy Resilience and Confidence

The CBN says ongoing reforms continue to drive economic stability. These measures include exchange rate adjustments, improved transparency, and tighter financial controls.

As a result, investor confidence is rising. Both local and foreign investors are showing renewed interest in the economy. In addition, financial institutions are responding to improved policy direction.

Inflation and FX Stability Support Economic Resilience

Inflation trends are improving as monetary policies take effect. At the same time, the foreign exchange market is showing better stability. These gains are helping businesses plan more effectively.

Moreover, the CBN continues to monitor price levels closely. This approach helps protect purchasing power and supports economic growth. You can also read our analysis on the impact of inflation on Nigerian households for deeper insight.

Nigeria Economy Resilience Holds Firm Despite Global Shocks

Nigeria’s economic outlook remains positive despite global uncertainty. Growth prospects are improving across both oil and non-oil sectors.

In addition, increased domestic investment is supporting recovery. Key sectors such as agriculture, manufacturing, and services are contributing to growth. Learn more about investment trends in our coverage of Nigeria’s business and economic outlook.

Global Risks Still Demand Caution

However, global risks still require careful attention. Oil price swings and geopolitical tensions could affect economic performance. External shocks may also influence trade and investment flows.

Even so, the CBN believes Nigeria is better prepared to manage these challenges. Stronger policies and improved systems now provide better protection.

Nigeria’s economy is becoming more resilient due to consistent reforms and better policy direction. The CBN’s position reflects growing confidence in the country’s economic strength.

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The Nigerian Naira maintained a stable but cautious position against the United States dollar during Tuesday morning trading on February 17, 2026, as currency markets opened the week on a relatively calm note.

After a weekend of steady consolidation, the local currency continued to trade around the ₦1,350 range at the official window, reflecting the impact of liquidity management efforts by the Central Bank of Nigeria.

Official Market Trends

At the Nigerian Foreign Exchange Market (NFEM), the naira opened the session at about ₦1,351.18 per dollar. By mid-morning, the exchange rate recorded a slight adjustment, with the dollar trading at an average of ₦1,354.86.

The movement suggests a mild pullback from the early session level of ₦1,351, as market participants responded to early-week corporate demand.

Analysts say the naira has largely avoided the typical mid-month volatility, attributing the stability to the transparent price-matching system of the Electronic Foreign Exchange Matching System (EFEMS). With the Monetary Policy Rate (MPR) positioned to support domestic stability, the official exchange rate has remained below the ₦1,400 threshold for more than two weeks.

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The naira closed the week slightly weaker at the official foreign exchange market, settling at N1,421.9 per dollar, despite a softer U.S. dollar in global markets.

Data from the Central Bank of Nigeria (CBN) shows that domestic dollar supply constraints continued to outweigh supportive external conditions, keeping pressure on the local currency throughout the trading week.

Although the naira avoided sharp volatility, it failed to sustain early-week gains, reflecting persistent distortions in Nigeria’s foreign exchange market.

At the official window, the naira closed at N1,421.9/$ on Friday, compared to N1,421.5/$ on Thursday and N1,423/$ on Wednesday. Earlier in the week, the currency traded at N1,420/$ on Tuesday and N1,420.5/$ on Monday, after opening at N1,425/$.

Compared with the previous week’s closing rate of N1,417.95/$, the naira ended the week marginally weaker.

In the parallel market, the naira depreciated slightly to N1,491/$ on Friday, from N1,490/$ the previous day. Weekly trading ranged between N1,483 and N1,491 per dollar, widening the gap between the official and street markets to about N70/$.

A Lagos-based currency trading expert, Dayo Omole, attributed the divergence to ongoing supply challenges.

“Nigeria has restrictions on foreign currency access and a limited dollar supply, so the naira may not strengthen significantly in the parallel market,” Omole said.

He noted that movements in the global dollar do not always translate into gains for the naira, as domestic supply-demand dynamics often dominate price action.

“When the dollar weakens globally but Nigeria continues to struggle with FX supply, the gap between official and parallel market rates can widen further,” he added.

Nigeria’s foreign exchange market has remained under strain following years of FX controls, multiple exchange rate regimes, and weak dollar inflows.

Despite recent reforms by the CBN aimed at improving transparency and market efficiency, structural challenges continue to affect liquidity and price discovery.

FX supply has remained constrained due to weaker oil export receipts, subdued foreign portfolio investment, and inconsistent diaspora remittances. The persistent gap between official and parallel market rates reflects unmet demand and lingering confidence issues among market participants.

Meanwhile, Nigeria’s external reserves stood at $45.9 billion last week, according to the CBN, providing some buffer for currency management.

The International Monetary Fund (IMF) recently upgraded Nigeria’s 2026 economic growth forecast to 4.4 per cent, citing optimism around ongoing economic reforms.

However, analysts note that geopolitical risks and policy uncertainty in the United States continue to add volatility to global FX markets, indirectly affecting frontier currencies such as the naira.

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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.

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The Naira ended the week on a slightly weaker note, depreciating by N2.60 against the United States dollar to close at N1,450.42/$ on Friday at the official foreign exchange market.

Data from the Central Bank of Nigeria (CBN) showed that the currency dipped by 0.17 per cent compared to Thursday’s closing rate of N1,447.82/$, extending a trend of modest fluctuations recorded throughout the week.

On Wednesday, the local currency traded at N1,447.64/$, a 0.1 per cent decline driven by sustained demand pressure and limited dollar supply in the official window. The depreciation continued a series of mild movements that began earlier in the week when the Naira exchanged at N1,445.39/$ on Tuesday, weaker than Monday’s N1,448.43/$.

Market analysts say the week’s trading pattern highlights the fragility of the official FX market, where frequent but moderate swings reflect ongoing supply constraints and seasonal demand.

The News Agency of Nigeria (NAN) reports that these modest losses have become increasingly common in recent months as the market adjusts to evolving monetary and fiscal interventions.

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Nigeria’s inflation rate dropped to 18.02% in September 2025, marking the lowest level in three years, according to data from the National Bureau of Statistics (NBS). The decline represents the sixth consecutive month of slowdown and a dramatic fall from the 34.19% peak recorded in June 2024, signaling growing confidence in the Central Bank of Nigeria’s (CBN) strategy to curb inflation.

At the IMF World Bank Annual Meetings in Washington, CBN Governor Olayemi Cardoso stated that inflation is expected to continue on a downward path in the near term. He attributed this trend to sustained tight monetary conditions, a stabilizing naira, and improvements in food supply across the country.

To tackle inflationary pressures, the CBN pursued an aggressive tightening cycle, raising the Monetary Policy Rate (MPR) from 18.75% in July 2023 to 27.50% by mid-2025, before slightly easing it to 27.00% in September. The Cash Reserve Ratio (CRR) for commercial banks was also lifted to 50%, later reduced to 45%, as part of what the Bank calls a firm anti-inflationary stance.

Core inflation eased to 19.53%, while food inflation the most volatile component fell to 16.87%, reflecting stronger agricultural output and lower logistics costs. The CBN noted that these improvements were reinforced by ongoing foreign exchange market reforms, which have stabilized the naira and narrowed the gap between the official and Bureau de Change (BDC) rates to less than 2%, compared with double-digit disparities a year earlier.

According to the CBN, the stabilization of the naira has been instrumental in reducing imported inflation. The Bank added that enhanced FX liquidity and reduced market volatility are contributing to stronger price stability. Nigeria’s foreign reserves have also risen above $43 billion, providing more than eleven months of import cover, a development driven by consistent foreign exchange inflows and growing investor confidence in government reforms.

While inflation remains above the CBN’s target range, the continued moderation has eased pressure on households and businesses. Analysts say this progress could offer room for future interest rate adjustments if the disinflation trend persists. The CBN emphasized that its priority is to consolidate these gains by maintaining exchange rate stability, boosting food production, and moderating energy costs to sustain price stability.

Governor Olayemi Cardoso reaffirmed the Bank’s commitment to restoring macroeconomic balance and anchoring inflation expectations. “Inflation affects every Nigerian,” he said. “Our job is to ensure that monetary policy supports a stable and predictable environment for growth.”

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Nigeria’s foreign exchange turnover has grown by 56.4%, reaching $8.6 billion in 2025, up from $5.5 billion in 2024, according to Mohammed Abdullahi, Deputy Governor for Economic Policy at the Central Bank of Nigeria (CBN).

He said the increase reflects ongoing monetary and fiscal reforms aimed at boosting liquidity, transparency, and investor confidence. “Average net FX flows between January 2023 and July have doubled,” Abdullahi noted at the Nigeria Investors Forum during the IMF/World Bank Meetings.

CBN reforms, including an order-based quotation system and remittance policy changes, have raised foreign reserves to $43.4 billion, covering 11 months of imports. The bank also released $13 billion to domestic and international banks to support liquidity.

CBN Governor Olayemi Cardoso said the reforms are rebuilding investor trust and positioning Nigeria as a leading investment destination. “The rise in reserves shows renewed confidence and stronger fundamentals,” he said.

Presidential Adviser Sanyade Okoli projected 7% GDP growth by 2027–2028, citing diversification and strong sectoral performance. “Oil now accounts for just 4% of GDP, down from 8% in 2021,” she said, adding that PPPs in roads, power, and digital infrastructure are driving expansion.

Cardoso also revealed that Nigeria’s trade surplus now stands at 6% of GDP, reflecting improved resilience and policy stability.

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Early in the day, the Central Bank of Nigeria acted fast. It sold $124 million at rates between N1,595 and N1,611 per dollar. This followed a $197 million sale just days before. These moves were aimed at calming the FX market. But despite the intervention, the naira continued to struggle. Demand for the dollar remained high, and supply stayed tight.

The impact was felt in the Eurobond space too. Investors began dumping Nigerian debt. Some Eurobond prices fell by up to $5. Yields jumped to 12%, a sign that borrowing costs for Nigeria could climb. Analysts believe this sell-off has more to do with global fears than local fundamentals. Yet the result is the same Nigeria may now find it harder to borrow abroad.

The main trigger for this global panic was Trump’s latest trade remarks. He floated a 10% import tax across the board. He also proposed new duties targeting goods from China and Mexico. Global investors reacted sharply.

The S&P 500 futures dropped by 3.1%. Nasdaq futures fell even harder. In Asia, Hong Kong’s stock market plunged by 13%. That’s its worst single-day crash this century. Europe also saw big drops. Germany’s DAX fell 6.4%, while the FTSE 100 lost over 5%.

This market rout could not have come at a worse time for Nigeria. The government is relying on international loans to fund its budget and key projects. Rising yields may now derail those plans. Borrowing will cost more. Fiscal pressures could increase.

The Central Bank has been proactive. But experts say more is needed than just selling dollars. A clear, long-term foreign exchange strategy is key. Traders want to know what’s next. So do foreign investors. Without strong communication, confidence may keep falling.

Nigeria’s economy is now exposed to global winds. What began as a trade war threat in Washington is now shaking policies in Abuja. Policymakers must act with urgency and precision. If not, the storm could get even rougher.

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This unexpected appreciation has sent ripples through the parallel market, leaving many traders scrambling to adjust to the rapidly shifting dynamics.

At the start of the year, the naira’s bullish momentum caught FX traders off guard. Having hovered between ₦1600/$ and ₦1800/$ for the better part of eight months, the local currency defied expectations, surging past the ₦1600/$ mark to close at approximately ₦1560/$ last weekend. This marked the first time in months that the naira has breached this psychological barrier, signaling a potential shift in Nigeria’s currency landscape.

The ripple effect has been particularly harsh on black market traders, with estimated losses ranging between ₦10 billion and ₦20 billion. Many traders, who had stockpiled dollars anticipating a seasonal surge in demand from returning Nigerians in January, found themselves on the losing end as the naira continued its rally. The typical January spike in demand failed to materialize, turning what was once a reliable profit period into a financial quagmire.

In the official FX window, the naira also showed strength, dipping below ₦1500/$ for the first time in recent history. Data from FMDQ indicated an average trading rate of ₦1,476.74/$, highlighting the currency’s resilience across both official and parallel markets. This development has fueled debates among economists and market analysts about the sustainability of the naira’s newfound strength.

While some experts dismiss the naira’s surge as a temporary blip—a classic “dead cat bounce”—others argue it reflects a genuine market correction. Comercio Partners, in its 2025 Macroeconomic Outlook, projected the naira could depreciate to ₦1800/$ by year-end, a stark contrast to its current performance. Conversely, Bismarck Rewane of Financial Derivatives Company posited that the naira is trading below its fair value, estimating its true market worth at around ₦1107/$ based on purchasing power parity.

Underlying the naira’s rebound are several macroeconomic factors. The Central Bank of Nigeria’s (CBN) commitment to maintaining high-interest rates has bolstered investor confidence, attracting foreign portfolio investments. Projections suggest the CBN might hold off on interest rate cuts until late in the year, providing further support to the naira. Additionally, Nigeria’s bond yields, nearing 20 percent, offer attractive real returns, especially if inflation trends downward.

Domestic shifts are also at play. A noticeable decline in FX balances held by commercial and investment banks suggests a pivot towards naira-denominated assets. Investors, seeking better returns, are liquidating dollar holdings to capitalize on local opportunities, including bank equities amid ongoing recapitalization efforts. For instance, Fidelity Bank’s recent public offer was oversubscribed by 238 percent, raising ₦23.77 billion.

International dynamics further complicate the picture. The U.S. dollar, while currently strong, faces structural vulnerabilities due to mounting foreign liabilities and shifting global economic alliances. The rise of BRICS, now encompassing over 50 percent of the global population and nearly 40 percent of global GDP, challenges the dollar’s dominance. Nigeria’s inclusion as a partner member could subtly bolster the naira’s standing in the long run.

Yet, challenges remain. The CBN’s delayed implementation of Bureau de Change (BDC) reforms raises questions about regulatory resolve. The proposed consolidation, aimed at curbing anti-market practices, could enhance market stability if executed effectively.

In the grand scheme, the naira’s recent gains represent more than a fleeting market anomaly. They reflect a complex interplay of local reforms, investor behavior, and shifting global economic tides. Whether this resurgence will endure or fade under external pressures remains to be seen, but for now, the naira is enjoying a rare moment in the financial spotlight.

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