The naira prolonged its appreciation in opposition to the greenback on the official international change (FX) market on the primary buying and selling day of 2026, supported by continued intervention by the Central Financial institution of Nigeria (CBN) and improved FX inflows, whilst renewed demand stress emerged within the parallel market following the graduation of the brand new tax regulation.
Knowledge revealed by the CBN confirmed that the naira strengthened by N4.91, representing a 0.34 % acquire, because the greenback was quoted at N1,430.84 on Friday in contrast with N1,435.75 on Wednesday, the ultimate buying and selling session of 2025, on the Nigerian International Alternate Market (NFEM).
On a year-on-year foundation, the native foreign money recorded a major appreciation of N110.52, translating to a 7.7 % acquire from N1,541.36 traded on the official window at the start of 2025. The efficiency displays sustained coverage efforts by the apex financial institution to enhance FX liquidity, rebuild confidence and slim volatility within the FX market.
In distinction, the parallel market, often known as the black market, witnessed renewed depreciation as demand stress resurfaced. Market contributors attributed the stress to people speeding to withdraw naira balances and convert to {dollars} following the graduation of the brand new tax regime, amid issues about potential modifications in transaction prices and compliance necessities.
Merchants stated the heightened demand pushed the naira to depreciate by N15, or 1 %, to shut at N1,500 on Friday, the primary buying and selling day of 2026, in contrast with N1,485 recorded on Wednesday, the final buying and selling day of 2025.
Regardless of the short-term stress, the naira stays stronger within the parallel market on a year-on-year foundation. In contrast with January 2025 ranges, the foreign money appreciated by N160, or 10.67 %, closing at N1,500 versus N1,660 traded at the start of January 2025, underscoring the broader features recorded over the previous yr.
In the meantime, whole FX inflows declined sharply to about $74.8 million final week, representing a drop of roughly 95 % week-on-week from the $1.46 billion recorded within the earlier week, based on a report by the Coronation Service provider Financial institution Analysis Division. The sharp moderation adopted distinctive inflows recorded earlier, largely pushed by seasonal components and one-off transactions.
Native sources dominated FX provide, accounting for about 70 % or $52.0 million of whole inflows. The CBN led home provide with $19.6 million, whereas exporters and importers contributed about $16.5 million. In distinction, worldwide inflows remained subdued at $23.0 million, with international portfolio buyers accounting for roughly $16.9 million, largely by way of investments in fixed-income devices.
The naira had strengthened throughout markets forward of the Christmas break, supported by sustained CBN intervention and improved FX liquidity. It closed at N1,443.38 per greenback on the NFEM, representing a 1.46 % acquire on a week-on-week foundation. The parallel market charge additionally appreciated to N1,475 per greenback, up 1.36 % week-on-week, pointing to improved FX stability and narrowing market distortions.
Nigeria’s exterior reserves, which offer the CBN with important capability to assist the naira and handle FX volatility, rose to $45.50 billion as of December 31, 2025. This represents an 11.3 % improve from $40.87 billion recorded within the corresponding interval of December 31, 2024, based on knowledge from the CBN. The regular rise in reserves continues to underpin confidence within the apex financial institution’s means to maintain FX market stability in 2026.
