Currency markets opened on a calm note on Wednesday, February 4, 2026, as the Nigerian naira sustained its recent stability against the United States dollar during early trading hours. The local currency has shown resilience since the beginning of the month, supported by improved liquidity at the official foreign exchange window and a relatively subdued parallel market.
At the Nigerian Foreign Exchange Market (NFEM), the naira recorded a marginal appreciation at the opening of trading, exchanging at about ₦1,387.42 to the dollar. As the session progressed into mid-morning, the rate experienced only slight movements, with the dollar quoted around ₦1,388.15, underscoring the largely steady tone of the market.
Market analysts attribute this continued stability to reforms introduced by the Central Bank of Nigeria (CBN), particularly the Electronic Foreign Exchange Matching System (EFEMS), which has enhanced transparency and improved price discovery. According to analysts, the current exchange rate reflects the CBN’s success in managing corporate demand for foreign exchange while steadily clearing long-standing FX backlogs. With Nigeria’s external reserves holding up, the official market has become more predictable for importers and international businesses, reducing volatility that previously characterized trading sessions.
The parallel market also reflected this calmer environment, although it continues to trade at a premium to the official window. In key commercial centres such as Lagos and Abuja, Bureau De Change operators were quoting the dollar between ₦1,460 and ₦1,475. Traders noted that while the gap between the official and informal markets persists, it has narrowed significantly compared to the sharp divergences recorded toward the end of 2025.
Demand in the parallel market has remained moderate, largely driven by personal travel needs and small-scale transactions, which dealers say are being adequately met by available supply. The absence of heavy speculative activity has helped prevent sudden price spikes, a common feature of early-year trading in previous periods.
Looking ahead, the outlook for the naira remains cautiously optimistic. Analysts suggest that if crude oil output remains stable and foreign portfolio inflows continue at current levels, the currency could maintain its range-bound performance through the first quarter of 2026. Market participants are expected to closely monitor the day’s closing rates, which may provide clearer signals on the direction of trading for the rest of the week.
Analysts Expect Stability, Not Sharp Gains
Analysts at Rhodium Capital Limited noted that the naira’s gains were supported by strengthening reserves and improved FX supply conditions.
“With the US dollar showing near-term weakness, liquidity has improved further, enhancing supply visibility and supporting stability in the domestic market,” the firm said.
They added that the parallel market also recorded gains, narrowing the gap between official and informal rates.
“This convergence points to improved FX availability across market segments and a more balanced demand-supply dynamic, reinforcing near-term stability. We expect the naira to remain steady at current levels as the CBN manages its activities to keep the currency stable,” Rhodium Capital concluded.