The Nigerian naira continued its gradual decline against the United States dollar on Wednesday, 25 February 2026, closing at N1,359.5 per dollar in the official Nigerian Foreign Exchange Market (NFEM).

Data released by the Central Bank of Nigeria (CBN) revealed that the naira opened trading at N1,356.11 per dollar and ended the session slightly weaker, reflecting ongoing pressures on the currency amid domestic and global economic challenges.

This movement indicates a marginal depreciation compared with Tuesday’s NFEM rates, where the naira opened at N1,355.37 and closed at N1,359.00. Analysts describe this as a manageable shift, highlighting that timely interventions by the CBN could stabilize the naira in the coming weeks.

The parallel, or black-market, rate shows a sharper divergence from the official market. Bureau de Change operators in major commercial centres—including Lagos, Abuja, Port Harcourt, and Kano—reported buying and selling rates of N1,370 and N1,390 per dollar, respectively. The higher rates in the unofficial market reflect persistent dollar demand and supply constraints, which continue to exert pressure on local businesses and consumers.

Financial experts note that the widening gap between official and parallel market rates underscores structural challenges within Nigeria’s forex market. These include limited dollar inflows, reliance on imports for critical goods, and the volatility of global oil prices, which remain a major driver of Nigeria’s foreign exchange reserves.

“The naira’s stability is influenced by multiple factors—external reserves, trade balance, and market confidence. The recent slight depreciation in the official market is manageable, but the parallel market shows the real strain felt by businesses and households demanding dollars for transactions,” said a Lagos-based forex analyst who preferred anonymity.

Despite these pressures, there is cautious optimism that the CBN’s interventions—such as forex auctions and policy adjustments—could restore confidence in the official market. Historical trends suggest that these measures can curb excessive volatility when applied consistently and transparently.

Businesses and importers are feeling the impact of the currency gap, particularly those relying on foreign inputs. Small and medium-sized enterprises (SMEs) report that the disparity between official and parallel market rates has increased operational costs, forcing some to raise prices or delay imports.

“Every week, we monitor the naira’s movement closely. The gap between the official rate and what we pay in the parallel market affects our cost projections and pricing strategy,” said Adeola Johnson, a Lagos-based trader. “Until there is a closer alignment, businesses will continue to bear the burden of currency fluctuations.”

Economists point out that sustained naira depreciation in the parallel market could have broader economic consequences, including inflationary pressures, reduced purchasing power, and strain on foreign debt servicing. Conversely, a stable naira would encourage investment, support consumer confidence, and bolster Nigeria’s economic recovery trajectory.

The CBN has repeatedly emphasized the importance of a market-friendly approach to forex management. Analysts believe that consistent policy measures, transparent interventions, and promotion of local production to reduce import dependency could gradually ease the parallel market premium and enhance the naira’s resilience.

In summary, while the naira’s official-market depreciation to N1,359.5 per dollar is moderate, the parallel market reflects deeper pressures caused by high dollar demand and supply constraints. Stakeholders—including the CBN, businesses, and consumers—must remain vigilant, with a coordinated approach to stabilize the currency and protect economic growth.

Market Summary:

• NFEM (Official) — N1,359.5 /$
• Parallel Market — N1,370 – N1,390

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The Nigerian naira appreciated to N1,450 per US dollar in the parallel market on Wednesday, up from N1,455 per dollar recorded on Tuesday. This rise marks the third consecutive day of gains for the currency in the official foreign exchange market.

Data from the Central Bank of Nigeria (CBN) showed that the naira strengthened to N1,359/$ at the official Nigerian Foreign Exchange Market (NFEM), rising from N1,367/$ previously. The N8 appreciation highlights a positive trend for the domestic currency.

The widening gap between the parallel and official market rates has increased to N91 per dollar, up from N88 per dollar, reflecting both market dynamics and investor sentiment. Analysts attribute the gains to improved forex inflows, growing investor confidence, and the CBN’s interventions in the currency market.

Economists say that sustained naira appreciation could reduce inflationary pressures and support economic stability, but caution that market volatility remains a factor. The CBN continues to monitor both official and parallel market trends to ensure currency stability while promoting growth in Nigeria’s economy.

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The Nigerian naira faces renewed pressure following the nomination of Kevin Warsh as the next Chair of the U.S. Federal Reserve by President Donald Trump. Warsh, expected to succeed Jerome Powell in May 2026, is widely regarded as an inflation hawk, prioritizing controlling inflation over aggressive rate cuts.

Financial analysts note that Warsh’s hawkish stance could strengthen the U.S. dollar, exerting downward pressure on frontier market currencies, including the naira. A stronger dollar often increases global borrowing costs, affects Nigeria’s foreign exchange reserves, raises import expenses, and widens the gap between official and parallel market rates.

The American dollar has already seen its largest rally since May 2025, following the nomination announcement. U.S. Treasuries with long maturities underperformed, reflecting investors’ expectations of sustained higher rates. Warsh, formerly a Morgan Stanley vice president and a senior economic advisor under President George W. Bush, is viewed as capable of preserving the Fed’s independence while maintaining a disciplined approach to monetary policy.

Current Naira Performance
Despite the looming external pressures, the naira ended January 2026 on a strong note. On the official foreign exchange market, the naira closed at ₦1,391 per dollar, supported by improved liquidity and a rise in Nigeria’s foreign reserves to $46.18 billion. The parallel market also showed reduced volatility, with rates improving from ₦1,490/$ to ₦1,453/$ over the week.

Experts caution that while the naira’s recent gains offer temporary relief, its value remains vulnerable to stronger dollar dynamics, U.S. monetary policy, crude oil production fluctuations, fiscal reforms, and structural imbalances within the Nigerian economy.

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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 report reveals that the Naira’s decline places it on par with the Ethiopian Birr and South Sudanese Pound. The depreciation is attributed to the rising demand for US dollars and limited foreign exchange inflow in the Nigerian economy. Despite efforts to stabilize it, the currency has continued to lose value throughout the year.

As of August 2024, the Naira had depreciated by approximately 43 percent, driven by surging dollar demand in the parallel market, financial institutions, money managers, and non-financial end-users. The Central Bank of Nigeria’s slow disbursement of foreign exchange to currency exchange bureaus has further compounded the situation.

Daily Trust reports that the Naira hit a new low of N1,700 per dollar in the parallel market on October 14, 2024. This marked a slight decline from N1,695/$1 on October 11, despite rising crude oil prices surpassing $80 per barrel.

The Nigerian government is under pressure to address the Naira’s depreciation and present the 2025 budget to offer solutions to the ongoing economic challenges.

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