Naira shows strong resilience, gains against dollar in January

The naira dollar exchange rate strengthened in late January as the currency gained at the official market, easing pressure on imports

The Nigerian naira showed renewed strength in the final week of January 2026, appreciating sharply against the United States dollar at the official Nigerian foreign exchange market.

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Data released by the Central Bank of Nigeria showed that the naira strengthened from a weekly high of N1,422.07 to the dollar on Friday, January 23, to close the month at N1,386.55 per dollar last Friday.

The movement represents a 2.47 per cent appreciation.

The official Nigerian foreign exchange market rate is the benchmark used for corporate international payments and approved transactions such as medical bills and school fees.

The naira maintained a steady upward trend from Monday, January 26, when it traded at N1,418.95 per dollar, before reaching its strongest level of the week at N1,386.55 per dollar by Friday.

Although the market recorded a peak of N1,423.50 per dollar earlier in the week, the narrowing gap between the highest and lowest daily rates towards month-end pointed to improving stability.

The strengthening of the Naira dollar exchange rate is significant for the broader economy, as it influences the pricing of imported goods and services processed through the banking system.

Analysts say sustained appreciation at the official market could help soften inflationary pressures linked to import costs.

In its weekly report, Cowry Assets Management Limited confirmed that the naira also recorded gains in the parallel market, appreciating by 2.11 per cent to close at N1,444.19 per dollar.

The firm said moderate gains could persist, supported by steady oil receipts, stronger non-oil inflows and a favourable trade balance.

“The naira is expected to maintain moderate gains, supported by steady oil receipts, stronger non-oil inflows, and a trade surplus,” the analysts said, adding that stable global oil demand and unchanged United States Federal Reserve interest rates could further support the currency.

Market data from CardinalStone showed the naira trading at about N1,465.00 per dollar in the parallel market, reflecting mixed pricing across unofficial segments.

AIICO Capital reported that the naira appreciated by 1.28 per cent in the parallel market during January, rising from N1,490.00 per dollar to close at N1,460.00 per dollar.

The firm attributed the trend to improved foreign exchange liquidity from foreign portfolio investors and local market participants, alongside limited intervention by the Central Bank of Nigeria.

AIICO Capital also noted that Nigeria’s external reserves increased by $687.40 million month on month to $46.18 billion, driven by stronger foreign exchange inflows, oil receipts and remittances.

Looking ahead, the firm projected that the naira would remain volatile but broadly stable in February, with modest appreciation supported by robust reserves, high crude oil prices and ongoing monetary and fiscal reforms.

Meanwhile, Bloomberg reported that uncertainty surrounding newly introduced tax laws is fuelling United States dollar demand in the parallel market.

A bureau de change operator, Abubakar Muhammed, said individuals were converting naira to dollars to protect assets and avoid possible scrutiny from tax authorities.

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Confirming the trend, the Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, said fears of account freezes were pushing some individuals to hold dollars temporarily.

David Okere