Naira strengthens to record N1,400/$ at official market

The naira on Wednesday strengthened to a record level of about N1,400 to the United States dollar at the official market, extending its appreciation streak at the Nigerian Foreign Exchange Market (NFEM).

Data released by the Central Bank of Nigeria (CBN) showed that the local currency appreciated by 1.26 per cent, with the dollar quoted at N1,401.22, compared with N1,418.95 recorded on Monday. This represents a gain of N17.73 within one trading session.

The performance marked one of the naira’s strongest levels since the introduction of the Electronic Foreign Exchange Matching System (EFEMS), under which transparency and price discovery in the FX market have improved.

The naira has sustained gradual gains in recent sessions, appreciating by between 0.1 per cent and 0.36 per cent on several trading days, reflecting improved dollar liquidity and growing confidence in the market.

At the parallel market, also known as the Bureau de Change (BDC) segment in Lagos, the naira exchanged between N1,475 and N1,490 to the dollar as of January 27, with an average buying rate of N1,480 and selling rate of N1,490.

The narrowing gap between official and parallel market rates, now within about 2-3 per cent, is seen as a sign of improved market stability.

Market operators attribute the improved performance of the naira to sustained regulatory reforms by the CBN, increased FX inflows, and better liquidity conditions.

The currency has continued its positive momentum into early 2026, building on its strong performance in 2025 when it posted one of its best annual showings in a decade, appreciating between 7 and 9 per cent against the dollar.

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Analysts expect the naira to remain relatively stable in the medium term, with many projections placing the exchange rate within a band of N1,400 to N1,500 per dollar this year, supported by improved FX liquidity and ongoing macroeconomic reforms.

After suffering steep 41 per cent depreciation in 2024, confidence in the naira appeared severely weakened. However, by the end of 2025, the official exchange rate had recovered to around N1,400 from levels as weak as N1,660 a year earlier.

The current stability is widely linked to major policy shifts by the administration of President Bola Tinubu, including the decision in mid-2023 to float the naira and remove fuel subsidies.

Though initially controversial, the reforms have gradually restored investor confidence and strengthened the credibility of the FX framework.

Meanwhile, the naira closed at N2,020 against the British pound sterling, N1,730 against the euro, N1,065 against the Canadian dollar and N205 against the Chinese yuan at the official market.