The Nigerian Naira concluded the trading week on a positive note, firming up against the United States Dollar in the official market. This upward movement was supported by a consistent increase in the nation's foreign exchange reserves, signaling a strengthening economic position.
Weekly and Daily Performance Breakdown
Data from the Central Bank of Nigeria (CBN) shows that the local currency closed at N1,417.95 to one US dollar on Friday, January 16, 2026. This represents a 0.5% appreciation compared to the rate of N1,424.50 recorded at the end of trading on the previous Friday, January 9.
On a daily basis, the Naira also made gains, improving by N2.05 from the N1,420.00 rate it traded at on Thursday, January 15. Over the entire five-day trading week, the currency's cumulative gain totaled N7.05, having started the week at a rate of N1,425.00 on Monday, January 11.
In contrast, activity in the parallel market was quiet, with the exchange rate holding steady at N1,490 per dollar throughout the week, indicating a narrowing gap between the official and unofficial windows.
External Reserves Rise and Analyst Insights
Bolstering the Naira's performance is the continued growth in Nigeria's external reserves. The reserves increased by 0.4% week-on-week, reaching $45.86 billion as of Thursday, January 15, 2026, up from $45.66 billion the week before.
The Nigerian Economic Summit Group (NESG), in its 2026 macroeconomic outlook, highlighted that the country's reserves are at their highest level in years. The group linked the shrinking gap between official and parallel market rates to enhanced transparency in foreign exchange operations and growing confidence in the government's policy direction.
To sustain this momentum, NESG advised authorities to maintain foreign exchange market liberalization through clear communication, transparent FX auctions, and closer coordination with financial institutions. The group emphasized that such measures would further cement currency stability and benefit sectors like manufacturing, which rely on imported raw materials, by reducing cost volatility.
Cautions and Central Bank Projections
Despite the optimistic outlook, analysts issued a note of caution. The NESG warned that the recent improvements are partly supported by vulnerable inflows. A potential drop in global oil prices in 2026, driven by an expected supply surplus, could weaken export earnings and put fresh pressure on the Naira, thereby increasing import costs.
The Central Bank of Nigeria remains optimistic about the trajectory. The apex bank projects that the external reserves could climb to approximately $51.04 billion in 2026, a significant rise from an estimated $45.01 billion in 2025. This forecast is predicated on easing FX pressures, better oil revenue, sovereign bond issuances, and stronger inflows from diaspora remittances.
In a related move to support market liquidity, the CBN recently disbursed $81 million to Bureau De Change (BDC) operators. This intervention follows an earlier injection of $18 million and is seen by economists as a step to bolster market confidence and provide short-term stability for the national currency.
