At the Nigerian Foreign Exchange Market (NFEM) on Tuesday, the naira appreciated to N1,401.22 per dollar, according to data from the Central Bank of Nigeria (CBN). The move represents a 1.26 per cent gain on the day, with the currency strengthening by N17.73 from Monday’s closing rate of N1,418.95.
Trading data showed heightened demand at the stronger end of the market, with some participants submitting bids as high as N1,400 per dollar, signalling increasing willingness to transact at firmer exchange rates.
The gains at the official window came alongside relative calm in the parallel market, where the naira closed unchanged at N1,485 per dollar, suggesting reduced arbitrage pressures between the two segments of the FX market.
Support for the currency has also been bolstered by Nigeria’s rising external reserves. Figures published by the CBN indicate that gross reserves climbed to $46.03 billion as of January 26, 2026, reflecting steady foreign inflows and improved sentiment around the country’s external position.
Market analysts broadly expect the naira to remain within a manageable range in the medium term. Several forecasts place the exchange rate between N1,400 and N1,500 per dollar this year, supported by improved FX liquidity, tighter market discipline, and ongoing macroeconomic reforms.
Tilewa Adebajo, chief executive officer of CFG Advisory, said the currency is likely to trade within that band, citing strengthening fundamentals. He pointed to reforms in the oil and gas sector, rising foreign capital inflows, and more robust diaspora remittances as key factors underpinning exchange rate stability.
Similar expectations have been expressed by the Nigerian Economic Summit Group (NESG), which projects the naira at around N1,480 per dollar in 2026. The group also anticipates Nigeria’s external reserves could rise to about $52 billion over the same period, driven by the consolidation of recent reforms and sustained stabilisation efforts.
The CBN’s own projections align with these views. The apex bank assumes an average exchange rate of N1,451.63 per dollar at the NFEM in the fourth quarter of 2025, with further moderation towards N1,400 per dollar in 2026. This outlook is anchored on expectations of improved FX market efficiency, stronger capital inflows, a current account surplus, and a broader economic recovery.
The naira’s recent strength has coincided with structural changes in the FX market. On October 3, 2024, the CBN introduced the Electronic Foreign Exchange Matching System (EFEMS) to curb speculation and enhance transparency and price discovery. The platform became fully operational on December 2, 2024, after a test phase in November, and has since been credited by market participants with improving confidence, tightening price alignment, and supporting the currency’s recent performance.