NAIRA ENDS JANUARY STRONGER, CLOSES AT ₦1,386/$ IN OFFICIAL FX MARKET

NAIRA ENDS JANUARY STRONGER, CLOSES AT ₦1,386/$ IN OFFICIAL FX MARKET


The Nigerian naira recorded a notable gain against the United States dollar in the final week of January 2026, closing the month stronger in the official foreign exchange market amid signs of improving stability.

Data from the Central Bank of Nigeria (CBN) showed that the official Nigerian Foreign Exchange Market (NFEM) rate strengthened to ₦1,386.55 per dollar at the close of trading on Friday, marking a 2.47 per cent appreciation from the week’s high of ₦1,422.07/$ recorded earlier in the month.

The official market rate, which applies to eligible transactions such as corporate payments, school fees, medical expenses, and other approved foreign obligations, followed a steady upward trend from January 26, when the naira traded at ₦1,418.95/$. It reached its strongest point of the month at ₦1,386.55/$ by week’s end.

Although the market experienced volatility earlier in the week, with the exchange rate touching a high of ₦1,423.50/$, the narrowing gap between daily highs and lows towards the end of January pointed to a period of relative calm and improved liquidity.

Economic analysts noted that the strengthening of the official exchange rate is a key signal for the broader economy, as it directly influences the pricing of imported goods and services processed through the banking system. Sustained appreciation could help ease inflationary pressure on import-dependent commodities.

Market analysts also reported positive movement in the parallel market, where the naira appreciated by 2.11 per cent over the week to close at approximately ₦1,444.19 per dollar. Other estimates placed the parallel market rate between ₦1,460/$ and ₦1,465/$ by the end of January.

According to financial analysts, January’s performance was supported by improved foreign exchange liquidity, driven by inflows from foreign portfolio investors, increased participation from local market players, and limited direct intervention by the central bank. Nigeria’s external reserves also rose by $687.40 million month-on-month, reaching $46.18 billion, buoyed by oil receipts, remittances, and broader stabilisation efforts.

Looking ahead, analysts project that the naira may remain volatile but broadly stable in February, with prospects for modest appreciation. Support is expected to come from robust external reserves, sustained crude oil prices, and ongoing monetary and fiscal reforms aimed at boosting foreign capital inflows.

However, concerns surrounding the implementation of new tax laws have reportedly increased dollar demand in the parallel market, as some individuals seek to hedge against uncertainty. Analysts believe this pressure could ease once greater clarity emerges around tax enforcement measures.

Despite these short-term risks, experts maintain that downside pressures are likely to remain limited in the near term, provided current macroeconomic conditions and policy reforms are sustained.

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