Naira Hits Two-Year High in Official Market, Foreign Reserves Climb to Highest Level Since 2018
- Naira reached N1,400.47 per dollar, its highest level in nearly two years amid rising external reserves
- Nigeria's external reserves also hit an eight-year high of $46.012 billion, boosting confidence in the FX market
- Experts disclosed that crude oil production reforms contributed to fiscal improvements, supporting naira recovery and economic stability
Nigeria’s currency strengthened further on Wednesday, January 28, 2026, with the naira touching its highest level in nearly two years at the official foreign exchange market, supported by rising external reserves and improved dollar inflows.
Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira appreciated to N1,400.47 per dollar, gaining 75 kobo or 0.05 percent from the N1,401.22 recorded on January 27.
Source: Getty Images
According to the NFEM data, the move marks the first time the currency has traded around the N1,400 level since May 2024.
Strongest showing since FX reforms
The latest performance represents the naira’s strongest showing since the Central Bank of Nigeria (CBN) introduced the Electronic Foreign Exchange Matching System, a reform aimed at improving transparency and price discovery in the official market.
The rally has been steady over the past week. The currency strengthened from N1,418.95 on January 26, advanced to N1,401.22 on January 27, and firmed further on Wednesday, reinforcing optimism around FX market stability.
Parallel market follows suit
The naira also posted gains in the parallel market, where it appreciated to N1,470 per dollar, its strongest level since December 1, 2025.
After holding steady at N1,490 per dollar between January 26 and 27, the currency gained sharply on January 28, narrowing the gap between the official and parallel markets and reflecting improving confidence among traders.
Reserves hit eight-year high
The currency’s resurgence has been underpinned by a significant rise in Nigeria’s external reserves.
Data from the CBN shows that gross foreign reserves climbed to $46.012 billion as of January 22, 2026, the highest level recorded in about eight years.
This marks an increase of roughly $510 million since the start of the year, up from $45.5005 billion on December 31, 2025. The last time reserves were at this level was in August 2018, highlighting a notable turnaround in Nigeria’s external position.
About 1.18 percent of the reserves are currently held in blocked funds, according to CBN figures.
In his New Year message, President Bola Tinubu said the growing reserve buffer had helped cushion the naira against external shocks and expressed confidence that the position would strengthen further in 2026.
Oil reforms begin to pay off
A key driver of the reserve build-up has been improved crude oil production following reforms in the oil and gas sector under the Petroleum Industry Act.
According to the Nigerian Upstream Petroleum Regulatory Commission, Nigeria’s crude oil production, including condensates, averaged 1.64 million barrels per day in 2025. This represents a 5.81 percent increase from the 1.55 million barrels per day recorded in 2024.
However, output dipped slightly in December, falling by 3.42 percent month on month to 1.54 million barrels per day, which weighed modestly on FX receipts during the period.
Output gains strengthen fiscal outlook
When condensates are excluded, crude oil production rose even more sharply. Output increased by 8.21 percent year on year, from 1.34 million barrels per day in 2024 to 1.45 million barrels per day in 2025.
Source: Getty Images
The stronger production profile has boosted government revenues, supported reserve accumulation, and improved fiscal performance, even as the government continues to access both domestic and external borrowing markets.
Together, rising reserves and sustained FX reforms are reinforcing the naira’s recovery and strengthening confidence in Nigeria’s macroeconomic outlook.
Dollar rises in official window, crashes in black market
Legit.ng earlier reported that the naira posted a split performance across Nigeria’s foreign exchange markets on Wednesday, January 21, 2025, reflecting persistent distortions between the official and parallel segments even as analysts grow more optimistic about the currency’s medium-term outlook.
At the official Nigerian Foreign Exchange Market (NFEM), the naira weakened marginally, closing at ₦1,420.69 to the dollar.
Data published on the Central Bank of Nigeria’s website showed the local currency shed ground despite signs of improved dollar supply from domestic participants.
Source: Legit.ng
