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 market, according to data from the Central Bank of Nigeria (CBN).
The local currency extended the relative stability recorded in 2025, buoyed by improved foreign exchange (FX) supply, sustained CBN interventions, and stronger external reserves. Over the past week, the naira hovered around the N1,440/$ level at the official window, strengthening by N12.53 per dollar, representing an 86 basis points week-on-week gain.
During the period, the naira traded within a band of N1,427.00/$ to N1,445.68/$, appreciating in three out of four trading sessions. Analysts noted that the exchange rate remained broadly stable compared with the sharp volatility experienced in the previous year.
Meristem Securities highlighted that while the average exchange rate in 2025 stood at N1,519.63/$, slightly weaker than N1,486.03/$ in 2024, volatility declined significantly to 0.53 per cent from 4.58 per cent. The firm attributed the reduced volatility to improved FX liquidity and stronger external buffers.
At the official Nigerian Foreign Exchange Market, the naira last traded below the N1,430/$ mark on October 31, 2025, when it exchanged at N1,421.73/$. Market stability has been largely driven by CBN-led reforms, including the rollout of the Electronic Foreign Exchange Matching System in December 2024 and the introduction of the FX Code, both of which enhanced transparency, improved price discovery, and curbed speculative activities.
Nigeria’s external reserves also recorded a strong performance in 2025, rising 10.60 per cent year-to-date to $45.21 billion, from $40.9 billion at the end of 2024. Although reserve accumulation faced pressure in the first half of the year due to foreign debt servicing and FX interventions, it rebounded in the second half on the back of stronger trade receipts, robust capital inflows, and proceeds from Eurobond issuances.
Looking ahead, Meristem projected that the naira would trade within a range of N1,350/$ to N1,528.57/$ in 2026, supported by sustained foreign inflows and resilient external reserves. The firm also noted that planned foreign currency–denominated issuances by the Federal Government, as outlined in the Medium-Term Expenditure Framework (MTEF), would further bolster reserves.
Despite expectations of relatively soft oil receipts, analysts anticipate that inflows from gas and non-oil exports, alongside strong foreign portfolio investment driven by improving investor confidence and a potentially dovish stance in developed economies, will support FX liquidity.
Coronation Research echoed similar optimism, projecting the naira to trade within N1,400/$ to N1,500/$ in 2026, supported by higher oil production, reduced reliance on fuel imports, and improved FX liquidity. However, it cautioned that sustained stability would depend on policy consistency, fiscal discipline, and continued reforms in the FX market.
AIICO Capital also maintained a stable outlook, stating that barring any major shift in FX supply, 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, pledging to deploy appropriate policy tools to attract foreign investment and consolidate stability in the foreign exchange market.