The naira ended the five-day buying and selling week on a powerful word, because the greenback fell to N1,386.55 on the official international trade market, marking the forex’s strongest efficiency in about two years.
Knowledge from the Central Financial institution of Nigeria (CBN) confirmed that the naira appreciated by N35.08, with the greenback quoted at N1,386.55, representing a achieve of two.53 per cent in contrast with N1,421.63 quoted on the Nigerian Overseas Trade Market (NFEM) on Friday final week.
The native forex opened the week at N1,418.95 per greenback and gained 2.34 per cent, or N32.40, by the shut of buying and selling. On a day-on-day foundation, the naira strengthened by N10.44, or 0.75 per cent, on Friday to shut at N1,386.55, in contrast with N1,396.99 quoted on Thursday on the NFEM.
On the parallel market, also referred to as the black market, the naira appreciated by N18 to shut the week at N1,452 per greenback on Friday, representing a achieve of 1.23 per cent from N1,470 per greenback recorded earlier within the week.
Nigeria’s exterior reserves, which give the CBN with the capability to defend the naira and stabilise the international trade market, have continued to develop steadily. In response to CBN knowledge, gross exterior reserves rose to $46.17 billion as of January 29, 2026.
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A brand new report by Quest Service provider Financial institution famous that Nigeria’s international trade market transitioned right into a extra secure regime in 2025, reflecting the cumulative affect of structural FX reforms, improved market transparency, and sustained tightening of home monetary situations. Following the sharp dislocations witnessed in 2024, the naira’s efficiency improved materially, supported by stronger FX liquidity, enhanced worth discovery on the Nigerian Autonomous Overseas Trade Market (NAFEM), and a gradual restoration of offshore investor confidence.
On the coronary heart of this stabilisation was the CBN’s FX reform agenda. The settlement of legacy FX obligations, alongside the introduction of the Digital Overseas Trade Matching System, marked a decisive shift in direction of a extra clear and rules-based FX market. These reforms lowered info asymmetry, improved market depth, and narrowed the arbitrage hole between the official and parallel markets, which had widened sharply following FX liberalisation in mid-2023. By 2025, worth convergence throughout market segments had largely been restored, considerably dampening speculative pressures on the forex.
In response to the report, improved confidence translated right into a significant restoration in FX inflows. Primarily based on knowledge from FMDQ, common month-to-month FX inflows elevated to $3.9 billion in 2025 from $2.6 billion in 2024, pushed primarily by international portfolio funding searching for to make the most of elevated home market yields. The CBN’s restrictive financial coverage stance, geared toward curbing inflationary pressures and delivering constructive actual returns, was instrumental in anchoring these inflows and positioning offshore buyers as a key marginal provider of FX to the market.
FX provide was additional supported by robust oil-related inflows and resilient diaspora remittances, which continued to common round $5 billion per quarter, offering a secure and non-cyclical supply of international trade liquidity.
These elements helped average trade charge volatility throughout the yr. After opening 2025 at round N1,475 per greenback, the naira traded inside a comparatively slender vary for a lot of the yr earlier than closing at roughly N1,429 per greenback on the official window. Importantly, the compression of the unfold between official and parallel market charges highlighted the effectiveness of ongoing FX reforms and enhancements in worth discovery.
Exterior financial situations additionally proved supportive. In 2025, the US Federal Reserve carried out three coverage charge cuts amid easing inflationary pressures and indicators of cooling labour market situations, signalling the beginning of a broader easing cycle throughout superior economies. This shift improved international danger urge for food and triggered capital flows into higher-yielding rising and frontier markets, together with Nigeria.
In response to Quest Service provider Financial institution, these inflows performed a essential buffering function during times of weaker FX receipts from conventional sources, notably oil exports, which have been weighed down by decrease international crude costs regardless of incremental beneficial properties in home manufacturing.
Looking forward to 2026, analysts at Quest Service provider Financial institution anticipate trade charge dynamics to stay broadly secure, though topic to intermittent pressures. Oil is predicted to proceed dominating Nigeria’s exterior accounts, accounting for practically 88 per cent of merchandise FX earnings. Whereas a modest enchancment in crude oil manufacturing is anticipated, the oil worth outlook stays tilted to the draw back because of expectations of elevated provide from non-OPEC producers and a probably weaker international demand setting. Because of this, oil-derived FX inflows are prone to stay unstable and weak to exterior shocks.
That mentioned, FX liquidity situations are anticipated to stay supported by sustained portfolio inflows, regular diaspora remittances, and continued coverage self-discipline, the analysts mentioned.
