Naira Begins 2026 with Massive Gains as CBN Pumps $7.5 Billion into FX Market
- The naira appreciates to N1,430.84 per dollar, reflecting improved FX supply and CBN reforms
- Market analysts note a significant decline in volatility, enhancing currency stability since 2025
- Experts project the naira will remain stable in 2026, supported by sustained foreign inflows and CBN interventions
Nigeria’s currency has begun 2026 with renewed strength, extending the relative calm achieved last year.
On the first trading day of the New Year, the naira appreciated to N1,430.84 per dollar at the official window, according to data from the Central Bank of Nigeria.
Source: Getty Images
The early gain reflects momentum built in 2025, when aggressive FX interventions and reforms helped tame extreme volatility.
In the final week of 2025, the naira hovered around the N1,440 per dollar mark at the official market.
Volatility drops sharply after turbulent years
Improved foreign exchange supply, sustained CBN interventions, and stronger external reserves combined to provide support.
Over the week, the currency gained N12.53 against the dollar, translating to an 86 basis-point appreciation week on week.
Trading remained within a narrow band of N1,427.00 to N1,445.68, with gains recorded in three out of four sessions.
Market analysts say the most notable shift has been the sharp decline in volatility. Meristem Securities observed that although the average exchange rate in 2025 at N1,519.63 per dollar was slightly weaker than N1,486.03 recorded in 2024, volatility fell dramatically to 0.53 per cent from 4.58 per cent.
This improvement signals deeper FX liquidity and stronger buffers compared with the instability of previous years.
At the official Nigerian Foreign Exchange Market, the naira last traded below N1,430 per dollar on October 31, 2025, when it closed at N1,421.73. Since then, pricing has remained largely orderly, supported by reforms led by the apex bank.
FX reforms strengthen transparency
Much of the stability has been attributed to structural changes introduced by the CBN.
The rollout of the Electronic Foreign Exchange Matching System in December 2024, alongside the FX Code, has improved transparency, enhanced price discovery, and reduced speculative activity.
These measures have helped restore confidence among investors and market participants, making exchange rate movements more reflective of underlying fundamentals, according to a report by Punch.
External reserves provide strong buffer
Nigeria’s external reserves also played a critical role. In 2025, reserves rose by 10.60 per cent year to date to $45.21 billion, up from $40.9 billion at the end of 2024.
While reserve accumulation faced pressure in the first half of the year due to foreign debt servicing and FX interventions, a strong recovery followed in the second half.
Higher trade receipts, increased capital importation, and proceeds from Eurobond issuances boosted FX inflows, strengthening the country’s ability to defend the naira and manage liquidity conditions.
Analysts see broad stability in 2026
Looking ahead, Meristem projects the naira will trade within a band of N1,350 to N1,528.57 per dollar in 2026.
The firm expects sustained foreign inflows, resilient reserves, and planned foreign currency issuances by the Federal Government under the Medium
The Term Expenditure Framework provides additional support. While oil receipts may remain soft, stronger gas earnings and non-oil exports are expected to offset pressures.
Meristem also anticipates robust portfolio inflows as global monetary conditions ease, supporting FX liquidity.
With continued CBN intervention capacity, both the official and parallel markets are expected to remain relatively stable, aided by tighter oversight following the issuance of new Bureau de Change licences.
Coronation, AIICO echo optimism
Coronation Research similarly projects the naira to trade between N1,400 and N1,500 per dollar in 2026, citing higher oil production, reduced fuel import dependence, and improved FX liquidity from export earnings.
However, it cautioned that sustained stability will depend on policy consistency, fiscal discipline, and continued transparency in the FX framework.
AIICO Capital also expects the naira to trade around current levels, barring any major supply shocks.
CBN signals continued support
In its 2026 outlook, the CBN reaffirmed its commitment to striking a balance between price stability and output growth.
The bank stated that it would continue to deploy appropriate policy tools to attract foreign investment and maintain stability in the foreign exchange market, setting the tone for a steadier naira in the year ahead.
Source: Twitter
Meanwhile, experts have predicted that the naira's stability is one of the economic trends to watch out for in 2026.
They disclosed that due to the massive $7.5 billion intervention by the apex bank in 2025, the local currency will remain stable, the dollar affordable and available for importers and dealers.
Naira breaks 13-year record, appreciates 6.5%
Legit.ng previously reported that the naira closed 2025 on a historic note, recording its first full-year appreciation in more than a decade as foreign exchange reforms by the Central Bank of Nigeria (CBN) began to reshape market confidence.
Data from the apex bank show that the currency strengthened by 6.5 per cent year-on-year, ending December 31 at ₦1,435 to the dollar, compared with ₦1,535 at the close of 2024.
This marked the naira’s first annual gain since 2012, when it edged higher to ₦157.29 from ₦158.99 the previous year.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
