The naira began the first trading day of the New Year on a positive note, appreciating to N1,430.84 per dollar at the official window, according to data released by the Central Bank of Nigeria (CBN).
The local currency’s early gains followed a period of relative stability recorded in 2025, supported by improved foreign exchange (FX) supply, sustained CBN interventions, and stronger external reserves serving as a buffer against volatility.
Over the past week, the naira traded around the N1,440/$ level at the official market, strengthening by N12.53 per dollar, representing an 86 basis point week-on-week appreciation. It traded within a range of N1,427.00 to N1,445.68 per dollar, posting gains in three out of four trading sessions.
Analysts noted that the exchange rate has remained broadly stable compared with the extreme volatility witnessed in the previous year. According to Meristem Securities, although the average exchange rate in 2025 at N1,519.63/$ was marginally weaker than N1,486.03/$ recorded in 2024, volatility declined sharply to 0.53 per cent from 4.58 per cent.
This improvement, Meristem said, reflects enhanced FX liquidity and stronger external buffers.
At the Nigerian Foreign Exchange Market, the naira last traded below the N1,430/$ level on October 31, 2025, when it exchanged at N1,421.73/$. Analysts attributed the relative stability largely to CBN-led reforms, including the introduction of the Electronic Foreign Exchange Matching System in December 2024 and the FX Code, both of which improved market transparency, pricing efficiency, and curbed speculative activity.
Nigeria’s external reserves also recorded significant growth in 2025, rising by 10.60 per cent year-to-date to $45.21 billion from $40.9 billion at the end of 2024. While reserve accumulation was pressured in the first half of the year by foreign debt servicing and FX market interventions, it rebounded strongly in the second half due to higher trade receipts, increased capital importation, and proceeds from Eurobond issuances.
Looking ahead, analysts at Meristem projected that the naira would trade within a range of N1,350.00/$ and N1,528.57/$ in 2026, supported by sustained foreign inflows and a resilient external reserve position.
They also noted that planned foreign currency-denominated issuances by the Federal Government, as outlined in the Medium-Term Expenditure Framework (MTEF), are expected to further boost reserves. While oil receipts may remain soft, inflows from gas and non-oil exports, alongside strong foreign portfolio investment, are expected to support FX liquidity.
Coronation Research echoed similar optimism, projecting that the naira would trade within a range of N1,400–N1,500/$ in 2026. The firm cited higher oil production, reduced dependence on refined fuel imports, and improved FX liquidity from export earnings as key supporting factors, while stressing the importance of policy consistency and investor confidence.
AIICO Capital also maintained a stable outlook, noting that barring any major supply shocks, the naira is expected to trade around current levels.
In its 2026 outlook, the CBN reaffirmed its commitment to balancing price stability with output growth, stating that appropriate policy tools would be deployed to attract foreign investment and consolidate stability in the foreign exchange market.
