Naira Achieves Record Performance Against US Dollar in Official Trading
The Nigerian currency has continued its impressive rally against the United States dollar, breaking through significant psychological barriers in the official foreign exchange market. On Tuesday, February 3, 2026, the naira reached a historic high of N1,372.91 per dollar, marking a substantial appreciation that has captured the attention of financial analysts and market participants across the country.
Market-Driven Appreciation Without Central Bank Intervention
What makes this development particularly noteworthy is that this appreciation occurred without any direct intervention from the Central Bank of Nigeria. Data from the regulatory authority revealed that the naira gained N17.45 against the greenback, representing a 1.3% appreciation from Monday's closing rate of N1,390.36 at the Nigerian Foreign Exchange Market (NFEM).
This marks a significant shift toward more market-driven currency movements, as the apex bank has not contributed to dollar inflows in recent weeks. During intraday trading, the dollar dipped as low as N1,360 before settling at N1,367 per dollar, demonstrating the naira's strengthening position throughout the trading session.
Broad-Based Currency Strength Across Major Currencies
The naira's strength was not limited to the US dollar alone. In the official market, the currency also demonstrated robust performance against other major global currencies:
- Gaining N21.92 against the British pound to close at N1,877.59 per £1
- Appreciating N24.76 against the euro to settle at N1,619.76 per €1
Meanwhile, in the parallel or black market, the naira remained steady at N1,450 per dollar, creating a gap of N77.09 between official and unofficial rates. This differential, while still significant, reflects the ongoing adjustments in Nigeria's foreign exchange ecosystem.
Growing External Reserves and Improved FX Supply Conditions
Nigeria's external reserves, which provide the Central Bank with the capacity to support the naira when necessary, continued their upward trajectory. According to the latest CBN data, reserves reached $46.59 billion as of February 2, 2026.
Analysts at Rhodium Capital Limited noted that the naira extended its gains at the NFEM, closing at N1,372.91 per dollar, supported by strengthening reserves and improved FX supply conditions. The firm further observed that with the US dollar showing near-term weakness, liquidity has improved further, enhancing supply visibility and supporting stability in the domestic market.
Foreign Portfolio Investment and Market Composition
Recent data reveals interesting patterns in Nigeria's foreign exchange inflows. Foreign portfolio investments were dominated by fixed-income investors, with bonds accounting for nearly half of total inflows during the period. According to Coronation Securities Limited, foreign portfolio investment in fixed income stood at $0.31 billion, representing 48.24% of total inflows.
This highlights sustained offshore appetite for high-yield naira assets amid improved market liquidity. Other notable components of the foreign exchange inflows include:
- Equity inflows increased by $0.01 billion, or 1.16%
- Foreign direct investment (FDI) amounted to $0.03 billion, or 4.72%
- Other international investments contributed $0.02 billion, or about 2.97%
On the domestic front, exporters and importers emerged as the largest non-official foreign exchange suppliers, providing $0.14 billion, or 21.67% of total inflows. Individuals accounted for 4.35%, while non-bank corporates contributed 16.29% through various channels including inter-company transfers, investment proceeds, and remittances.
Diaspora Remittances Show Remarkable Growth
Adding to the positive foreign exchange outlook, the Central Bank of Nigeria has reported a dramatic increase in remittances from the Nigerian diaspora. Over the past two months, these inflows have grown by an impressive 200% to reach $600 million.
CBN Governor Olayemi Cardoso, speaking at the Delta State-Brazil Business and Investment Roundtable in São Paulo, noted that monthly inflows had jumped from approximately $200 million to $600 million. The governor projected that these remittances could reach at least $1 billion by year-end, reflecting a significant improvement in Nigeria's foreign exchange profile.
The combination of market-driven appreciation, growing external reserves, improved foreign exchange supply conditions, and increasing diaspora remittances paints a promising picture for Nigeria's currency stability and economic outlook. As the naira continues to demonstrate resilience in the official market, market participants will be watching closely to see if this positive trend can be sustained in the coming weeks and months.
