Naira Strengthens to ₦1,342.30 per Dollar as FX Supply Improves
The Nigerian naira continued its positive trajectory in the Nigerian Foreign Exchange Market (NFEM), closing stronger at ₦1,342.30 per United States dollar. This represents a modest appreciation of ₦1.44, reflecting improving conditions in the foreign exchange market as supply begins to outpace demand, easing pressure on the local currency.
Stable Trading Band and Market Confidence
The local currency traded within a relatively tight band of ₦1,340 to ₦1,344 per dollar during the trading session, signaling increased stability compared to previous days. Market sentiment has been buoyed by stronger inflows from multiple sources including foreign portfolio investors, exporters, and non-bank corporates. These improved foreign exchange inflows have helped boost liquidity, giving dealers more room to meet demand and moderate exchange rate volatility.
Commercial banks, including major players like Guaranty Trust Bank and Zenith Bank, were seen offering dollars at relatively competitive rates, further supporting the naira's appreciation trend according to market reports. Despite these improved supply conditions, trading activity showed some moderation with interbank turnover dropping to $72.26 million across 82 deals, down from $114.35 million recorded in the previous session.
External Reserves Position and Global Influences
Nigeria's external reserves stood at $48.70 billion, showing a slight decline from previous levels and remaining below the $50 billion mark last seen in 2009. This dip reflects ongoing global uncertainties, particularly in the commodities market, which continues to influence the country's foreign exchange earnings. The mixed performance across global commodities underscores the delicate balance shaping Nigeria's foreign exchange outlook, even as short-term gains provide relief for the naira.
Oil Price Surge and Economic Implications
Crude oil prices climbed sharply amid doubts surrounding upcoming peace talks between the United States and Iran. Investors remain uncertain whether negotiations will ease supply disruptions linked to tensions in the Middle East. Brent crude rose by 3.39% to about $98.15 per barrel, while U.S. West Texas Intermediate (WTI) surged 5.89% to trade near $93.32 per barrel. Rising oil prices typically support Nigeria's foreign exchange position, given the country's heavy reliance on crude exports for revenue generation.
Gold Prices and Commodity Market Dynamics
In contrast to the oil market movement, gold prices showed limited movement after hitting a one-month high in the previous session. Spot gold dipped slightly by 0.66% to around $4,791.81 per ounce, while U.S. gold futures eased by 0.24% to $4,812.26 per ounce according to market reports. This mixed performance across global commodities highlights the complex factors influencing Nigeria's economic landscape.
Historical Context and Reserve Performance
Recent data from the Central Bank of Nigeria indicates that the country's foreign exchange reserves have climbed to their highest level in eight years, offering renewed optimism for the naira and strengthening Nigeria's external buffers amid ongoing economic reforms. Gross external reserves rose to $46.012 billion as of January 22, 2026, marking an increase of about $510 million since the start of the year. This level was last recorded in August 2018, underscoring a notable turnaround in Nigeria's external position despite current fluctuations.
Analysts suggest that while liquidity has improved in the foreign exchange market, cautious trading persists among market participants. The combination of improved supply conditions, competitive bank rates, and supportive oil prices has created a favorable environment for the naira's appreciation, though global economic uncertainties continue to present challenges for Nigeria's broader economic stability.
