The naira continued its steady appreciation against the US dollar across Nigeria’s foreign exchange markets on Wednesday, strengthening to N1,358.28 at the official window, its strongest level in about two years, supported by growing external reserves and improved liquidity conditions.
Data from the Central Bank of Nigeria (CBN) showed that the local currency gained N14.63 at the Nigerian Foreign Exchange Market (NFEM), appreciating by 1.1 percent from N1,372.91 quoted in the previous trading session. The continued rally reflects improving dollar supply and growing confidence among market participants following sustained foreign exchange reforms.
At the parallel market, also known as the black market, the naira traded steadily at N1,450 per dollar, according to checks with street traders. The stability in the unofficial market suggests easing pressure on foreign exchange demand and improved access to dollars across market segments.
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Nigeria’s external reserves have continued to trend upward, reinforcing confidence in the foreign exchange market. According to CBN data, gross external reserves rose to $46.70 billion as of February 3, 2026, underscoring the country’s strengthened external position and increased capacity to meet foreign obligations.
At the Monetary Policy Committee (MPC) meeting held in November 2025, MPC member Aku Pauline Odinkemelu highlighted the improving stability of the exchange rate, attributing the trend to rising capital inflows and a sustained current account surplus. In her personal statement, she noted that external reserves recorded a third consecutive monthly increase, reaching $43.20 billion in October 2025, equivalent to about 8.3 months of import cover. According to her, this development significantly enhanced Nigeria’s resilience to external shocks and reflected sustained investor confidence in the economy.
Another MPC member, Bala Moh’d Bello, observed that speculative activities in the foreign exchange market have declined sharply, contributing to greater transparency and more efficient, market-driven price discovery. He said these improvements have helped stabilise the naira and reduce distortions that previously widened gaps across FX segments.
Echoing similar views, Emem Usoro, CBN deputy governor said Nigeria’s external buffers have strengthened, with gross reserves climbing close to post-pandemic highs. She noted that the stronger reserve position has supported the emergence of a more resilient and orderly foreign exchange market.
Analysts at Rhodium Capital Limited also pointed to improved fundamentals supporting the naira’s recent performance. They said the local currency extended its gains during the latest NFEM trading session, closing at a stronger rate of N1,358.28 per dollar, aided by steady external reserve accumulation and improved foreign exchange supply conditions.
According to the analysts, near-term weakness in the US dollar, combined with enhanced supply transparency in the domestic FX market, has improved overall stability. They also noted that appreciation in the parallel market has helped narrow the gap between official and unofficial exchange rates, indicating better FX availability across market segments and a more balanced supply-demand dynamic.
Rhodium Capital expects the naira to sustain its current bullish momentum in the near term, supported by rising external reserves and continued improvement in foreign exchange market conditions.
