Naira Appreciates Against Major European Currencies in Foreign Exchange Market
The Nigerian naira demonstrated notable strength against key European currencies in the foreign exchange market on Wednesday, February 4, 2026. Market data reveals significant appreciation against both the British pound sterling and the euro, signaling positive momentum for the local currency amidst ongoing economic reforms.
Detailed Exchange Rate Movements
According to official figures released by the Central Bank of Nigeria, the naira gained substantial ground against the pound sterling, appreciating by N14.16 to close at N1,863.43 per £1. This represents a marked improvement from the previous day's rate of N1,877.59 per £1. Similarly, the currency strengthened against the euro, recording a gain of N13.73 to settle at N1,606.03 per €1, compared to N1,619.76 per €1 on Tuesday.
Market analysts attribute these gains to enhanced liquidity conditions and strategic interventions by monetary authorities. The improved foreign exchange supply has effectively outpaced demand across various market segments, creating favorable conditions for the naira's performance.
Parallel Market and Banking Sector Performance
The positive trend extended beyond official channels into the parallel market and banking institutions. At the GTBank foreign exchange desk, the naira strengthened by N3 against the US dollar, trading at N1,383 per $1 compared to Tuesday's rate of N1,386 per $1. In the parallel market, the currency gained N5 against the dollar, trading at N1,450 per $1, up from N1,455 per $1 recorded previously.
Bureau de Change operators reported current trading rates that reflect the naira's improved position. According to Abdullahi, a BDC operator, the dollar buying rate stands at N1,445 with a selling rate of N1,460. For the British pound sterling, the buying rate is N1,970 while selling occurs at N2,005. The euro is being bought at N1,680 and sold at N1,720.
Comprehensive Currency Exchange Rates
The Central Bank of Nigeria provided updated exchange rates for multiple international currencies, offering a comprehensive view of the naira's position in global markets:
- US Dollar: N1,372.91
- British Pound Sterling: N1,877.60
- Euro: N1,619.76
- UAE Dirham: N369.77
- CFA: N2.51
- Yuan/Renminbi: N197.84
- Danish Krone: N216.84
- Japanese Yen: N8.81
- Saudi Riyal: N366.09
- South African Rand: N86.02
- Swiss Franc: N1,765.81
Driving Factors Behind Naira's Strength
Financial experts point to several key factors contributing to the naira's recent appreciation. Sustained foreign exchange inflows from international investors seeking opportunities in Nigeria's emerging market have played a crucial role. These inflows have simultaneously bolstered the country's external reserves, which stood at $46.59 billion as of February 4, 2026.
The Central Bank of Nigeria's capacity to support the local currency has been enhanced by these reserve levels, even without direct market intervention. The current period represents relative stability in Nigeria's foreign exchange markets, a positive development for both domestic and international economic stakeholders.
Market Forecasts and Economic Outlook
Financial institution CardinalStone Partners has projected continued recovery for the naira throughout 2026. Their economic outlook report, "Indicators Align for Sustained Macro Gains," published on January 6, 2026, suggests the currency could trade between N1,350 and N1,450 per dollar. This forecast is based on ongoing foreign exchange reforms, improved market liquidity, and moderating inflation rates.
While expressing cautious optimism, the report also identifies potential challenges, including declining global oil prices and increasing domestic security concerns. However, the anticipated decline in inflation and reduced fuel costs are expected to provide relief to Nigerian households while stabilizing consumer prices across the economy.
The naira's performance against major European currencies represents a significant development in Nigeria's economic landscape, reflecting the effectiveness of recent monetary policies and growing investor confidence in the nation's financial markets.
