Resilient Naira Gains Ground Despite FX Slowdown
Atume Terfa
Nigeria’s currency, the naira, delivered a surprising start to 2026, extending gains across both official and parallel foreign exchange markets despite a notable slump in weekly dollar inflows. The performance signals growing confidence in Nigeria’s FX framework and the Central Bank’s intervention strategies.
According to the Central Bank of Nigeria (CBN), the naira appreciated slightly in the official Nigerian Foreign Exchange Market (NFEM) on Monday, trading at around ₦1,429.30 per dollar, up from approximately ₦1,430.84 at the end of last week’s session. Meanwhile, in the parallel (black) market, the naira strengthened by about 0.7 per cent, moving to roughly ₦1,490 per dollar, down from about ₦1,500 previously.
The resilience came even as foreign exchange inflows into the official market fell sharply, sliding more than 20 per cent week on week — from $748.4 million to $593.7 million. Analysts attribute the drop to subdued market activity typical of the start of the year and reduced participation from offshore investors.
Despite the decline, local participants dominated the inflow mix, accounting for nearly 83 per cent of total supply. Individuals led as the largest contributors, followed by the CBN itself alongside exporters and importers, underscoring robust domestic engagement in foreign exchange trading.
Nigeria’s external reserves ticked up modestly to around $45.56 billion in early January — a buffer that supports the CBN’s capacity to intervene in FX markets and help moderate volatility.
Market watchers believe that in the coming weeks, the naira is likely to trade within a relatively stable range in the official window, reflecting seasonal slowing of demand after year-end pressures and ongoing policy support from the central bank.
The currency’s recent trajectory builds on broader trends seen in 2025. Data from FX analysts shows the naira ended the year with a notable year-on-year gain against the dollar, marking its first annual appreciation in over a decade. This improvement has been attributed to sustained FX reforms, enhanced price discovery mechanisms and more transparent market operations.
While the dip in dollar inflows highlights ongoing challenges — including global investor caution and shifting capital flows — the naira’s ability to gain ground across market segments reflects strengthening investor confidence in Nigeria’s FX architecture. As long as foreign exchange reserves remain solid and capital inflows show signs of recovery, analysts say the naira’s resilience could continue well into the new year.
