Naira Strengthens by N27 Against US Dollar as External Reserves Exceed $50 Billion
The Nigerian naira has demonstrated significant strength in the official foreign exchange market, appreciating by N27.03 week-on-week to close at N1,366.23 per US dollar. This improvement, representing a 1.98% gain, is supported by enhanced foreign exchange liquidity and renewed market confidence, as Nigeria's external reserves have crossed the $50 billion threshold, providing approximately 9.68 months of import cover.
Weekly and Daily Performance in Official Market
Data released by the Central Bank of Nigeria (CBN) indicates that the naira closed at N1,366.23 per dollar on Friday, compared to N1,393.26 recorded the previous Friday. On a day-on-day basis, the currency posted a modest gain, strengthening by N5.28 or 0.4% from N1,371.51 per dollar quoted on Thursday. Across the five trading sessions of the week, the naira appreciated by N39.39 or 2.88%, rising from N1,405.62 per dollar on Monday, the first trading day of the week.
Parallel Market Dynamics and Exchange Rate Spread
In the parallel market, commonly referred to as the black market, the naira ended the week at N1,410 per dollar on Friday. This represented a gain of N10 or 0.71% week-on-week from N1,420 per dollar recorded at the close of the previous week. On a day-on-day basis, the parallel market rate remained broadly stable, though the gap between the official and parallel market exchange rates widened during the week. The spread expanded to N44 on Friday compared with N27 recorded in the previous week.
External Reserves Growth and Market Stability
Nigeria's foreign reserves continued their upward trajectory during the week, crossing the $50 billion threshold. The reserves rose to $50.45 billion, representing a 0.24% increase compared with $49.90 billion recorded in the previous week, according to figures published on the CBN's website. This rising reserve level has strengthened the country's foreign exchange buffers and improved liquidity in the currency market.
Central Bank Policy and Investor Confidence
Olayemi Cardoso, governor of the Central Bank of Nigeria, stated that recent improvements in the foreign exchange market reflect the outcome of deliberate policy measures aimed at restoring confidence and improving transparency. He emphasized that the foreign exchange market now operates with significantly stronger liquidity and efficiency, with previously outstanding demand largely cleared, allowing participants to conduct transactions without depending heavily on special interventions by the central bank. Cardoso added that Nigeria has experienced a notable rise in foreign investment inflows in recent years, with capital and investment inflows into the country increasing by nearly 200% between 2023 and 2025.
Expert Forecast for Naira Exchange Rate in 2026
Yemi Kale, Chief Economist at the Africa Export-Import Bank (Afreximbank), projected that the naira is expected to trade between N1,350 and N1,450 per US dollar in 2026. He made this projection while delivering the keynote address at the FirstBank Nigeria Economic Outlook 2026, outlining scenario-based forecasts for the USD/NGN exchange rate, taking into account oil prices, foreign-exchange inflows, inflation trends, and policy consistency.
