Naira Records Steady Appreciation Against Dollar in Second Trading Week of 2026

Naira Records Steady Appreciation Against Dollar in Second Trading Week of 2026

The naira appreciation against dollar continued in the second trading week of 2026, as Nigeria’s local currency posted a modest but consistent gain in the official foreign exchange market. The performance reflects improving FX fundamentals and growing confidence in the country’s external financial position.

According to trading data from the official FX window and reserve figures released by the Central Bank of Nigeria (CBN), the naira closed the week stronger than the previous one. The gains were supported by relative market stability, a slight increase in foreign exchange reserves, and positive medium-term projections from the apex bank.

What the Latest FX Data Shows

At the close of trading on Friday, the naira exchanged at ₦1,424.5/$, improving from ₦1,431/$ recorded at the end of the prior week.

On a year-on-year basis, the performance still represents an appreciation. On January 10, 2025, the naira closed at ₦1,544.5/$, highlighting the gradual strengthening trend seen over the past year.

Throughout the week, FX trading showed limited volatility:

Monday: ₦1,428/$

Tuesday: ₦1,416/$

Wednesday: ₦1,421/$

Thursday: ₦1,421/$

Friday: ₦1,424.5/$

Market analysts described the movement as a mild but encouraging appreciation, signaling easing pressure in the foreign exchange market as 2026 begins. The stable trend also points to improved liquidity and a better balance between FX demand and supply.

External Reserves Provide Support

Backing the naira appreciation against dollar, Nigeria’s external reserves edged up to $45.62 billion on Tuesday, from $45.60 billion on Monday, according to CBN figures.

Although marginal, the increase provided additional support for the local currency and helped stabilize market expectations.

Looking ahead, the CBN expressed optimism about the naira’s medium-term outlook. The apex bank projects external reserves could rise to approximately $51.04 billion in 2026, up from an estimated $45.01 billion in 2025.

The CBN attributes this positive outlook to:

Easing FX pressures

Improved oil revenue

Planned sovereign bond issuances

Rising diaspora remittance inflows

In addition, expanding domestic refining capacity is expected to play a key structural role in strengthening the naira, as reduced fuel imports would significantly lower foreign exchange demand over time.

Why the Naira’s Performance Matters

A stronger and more stable naira delivers several economic benefits. It helps curb imported inflation, boosts investor confidence, and supports overall macroeconomic stability.

Higher external reserves also enhance the CBN’s ability to manage FX volatility, while stronger oil earnings and capital inflows improve Nigeria’s balance of payments position.

Commenting on the outlook, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), described prospects for the naira in 2026 as largely positive. He identified the strength of external reserves as a major stabilizing factor and emphasized the importance of sustained policy consistency, export growth, and ongoing FX market reforms to maintain recent gains.

Key Things to Know

Nigeria’s FX market is showing gradual improvement following reforms aimed at boosting transparency and liquidity.

External reserves remain a critical indicator of currency stability and investor sentiment.

Growth in domestic refining capacity is expected to reduce FX demand by lowering fuel import dependence over time.

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