Naira gains strength against the dollar as improved FX liquidity and easing demand support stability at Nigeria’s official and parallel markets

Nigeria’s currency, the naira, closed the third week of the year on a stronger footing, appreciating against the United States dollar on Friday, January 23, 2026, amid improved liquidity and easing demand pressures in the foreign exchange market.

Also read: Naira appreciation boosts investor confidence

At the official window, data from the Nigerian Foreign Exchange Market showed the naira opening at ₦1,420.13 to the dollar before strengthening to about ₦1,418.16 by mid-morning, a gain of roughly 0.31 per cent compared with the previous session.

Market analysts linked the appreciation to increased dollar supply and a more efficient allocation framework at the official market.

Continued efforts by the Central Bank of Nigeria to clear outstanding foreign exchange obligations were also cited as a stabilising force, helping to shore up confidence among businesses and investors.

Traders said enhanced transparency within the foreign exchange market has created a more predictable trading environment for corporate buyers.

Exchange rates have largely moved within a narrow band throughout January, reducing panic-driven demand and encouraging calmer market behaviour.

The positive momentum extended to the parallel market, where the dollar softened slightly.

In major trading hubs across Lagos, including Ikeja and Broad Street, as well as Abuja’s Wuse Zone 4, the greenback traded between ₦1,470 and ₦1,485.

Bureau de Change operators noted that the modest narrowing of rates suggests retail demand is being adequately met.

They added that speculative pressures often associated with the start of the year have been muted, supported by tighter oversight and steady inflows from diaspora remittances.

Analysts said the gradual convergence between official and parallel market rates will remain a key indicator to watch in the first quarter of 2026.

If current trends hold, the naira gains strength narrative is expected to persist, underpinned by improving foreign reserves and early signs of progress in Nigeria’s trade balance.

Also read: Naira gains as capital inflows surge to $20.98bn

Attention is now focused on the close of trading for the week, as market participants assess whether the currency’s performance will set a constructive tone for the final stretch of January.