Naira Stages Remarkable Recovery, Reaching Two-Year High Against US Dollar
Nigeria's national currency has demonstrated a powerful resurgence, briefly touching a significant milestone of ₦1,392 per US dollar at the Central Bank of Nigeria's foreign exchange window. This achievement marks the naira's highest valuation in two years, reflecting a notable shift in market dynamics and investor confidence.
Market Performance and Central Bank Adjustments
The local currency concluded the latest trading session on a positive trajectory, building upon gains from previous days. At the Nigerian Foreign Exchange Market, the naira appreciated by 5 basis points against the US dollar, settling at ₦1,400.48/$. This sustained improvement underscores growing market confidence in Nigeria's economic management.
Market data revealed that the naira traded within an intraday range of ₦1,392/$ to ₦1,415/$, supported by consistent demand from foreign portfolio investors and active participation from domestic market players. Analysts attribute this upward movement to the absence of significant liquidity pressures and ongoing reforms within Nigeria's foreign exchange framework.
External Reserves Reach $46.07 Billion Milestone
Supporting the naira's impressive performance, the Central Bank of Nigeria reported a further increase in the country's gross external reserves. Latest figures indicate reserves grew by $27.86 million from the previous day to reach $46.07 billion as of January 27, 2026.
This steady accumulation of reserves has been strengthened by higher crude oil production levels and relatively supportive global oil prices. The improved reserve position provides the central bank with enhanced capacity to meet foreign exchange obligations and stabilize the local currency when necessary.
Global Oil Market Provides Additional Support
Global oil prices have offered substantial support to Nigeria's external economic position. Crude prices climbed to their highest levels since late September following a winter storm that disrupted US crude output. Supply concerns were further amplified by continued outages in Kazakhstan and a weaker US dollar.
Brent crude rose by 3.71 percent, or $2.40, to trade around $67.17 per barrel, while US West Texas Intermediate gained 2.38 percent to approximately $62.07 per barrel. Higher oil prices hold particular significance for Nigeria, where crude exports remain a primary source of foreign exchange earnings.
Gold Surges Amid Global Financial Uncertainty
Meanwhile, global financial markets reflected increasing uncertainty, with gold prices reaching record levels. Gold climbed above $5,300 per ounce for the first time, driven by a weakening US dollar and growing investor concerns ahead of the US Federal Reserve's policy decision.
Spot gold prices jumped by 136 basis points to $5,083.69 per ounce, while US gold futures eased slightly to $5,117.09 per ounce. According to financial analysts, safe-haven demand is likely to continue supporting gold prices amid mixed market sentiment and uncertainty surrounding oil price direction.
Cautiously Optimistic Outlook for Nigerian Currency
With improving reserves, stronger inflows, and favorable external conditions, analysts maintain a cautiously optimistic outlook for the naira's near-term prospects. However, they emphasize that sustained gains will depend on several critical factors.
Key elements for continued naira strength include:
- Consistent foreign exchange inflows into the Nigerian economy
- Disciplined monetary policy implementation by the Central Bank
- Stability in global commodity markets, particularly oil
- Continued market confidence in Nigeria's economic reforms
The recent currency performance coincides with broader global currency movements, including the US dollar falling to its lowest level in four years. This development has created opportunities for the naira and other global currencies to appreciate, with investors shifting funds into traditional safe havens such as gold, the euro, and the Swiss franc.
Market observers note that the dollar dropped 1.3 percent against a basket of major currencies, marking its fourth consecutive day of losses before slipping a further 0.2 percent to reach its weakest level since February 2022. This global currency realignment has contributed to the favorable environment for the naira's recent gains.
