Naira Trades at New Rate as Report Predicts 2026 Exchange Benchmark
- Naira dipped to N1,419.71 per dollar amid cautious trading on January 8, 2025
- Analysts expect naira stability in 2026 with ongoing CBN reforms supporting investor confidence
- Oil market uncertainties pose risks to Nigeria's external position and FX inflows
The naira weakened marginally against the US dollar at the official foreign exchange window on Thursday, January 8, 2025, extending a cautious trading pattern seen in recent sessions.
Data from the Central Bank of Nigeria showed the currency depreciated by N1.45 to close at N1,419.71 per dollar, compared with N1,418.26 recorded previously.
Source: Getty Images
According to the CBN data, trading activity remained relatively calm, with the naira moving within a narrow band.
The currency exchanged between a low of N1,418.00 per dollar and a high of N1,422.00 per dollar, reflecting balanced demand and supply conditions at the official market.
Market outlook tied to reserves and reforms
Analysts say near-term movements in the naira are likely to continue tracking market fundamentals, particularly dollar inflows and the level of Nigeria’s external reserves.
Improving reserves have helped moderate volatility in recent months, supporting the CBN’s ongoing efforts to stabilise the exchange rate.
In its 2026 outlook report, PwC expects the naira to remain broadly stable through next year, supported by sustained reforms at the central bank and improved portfolio inflows.
These reforms, which include greater transparency and reduced market distortions, have helped restore some investor confidence in Nigeria’s foreign exchange framework.
The naira recorded an overall gain in 2025, a performance that analysts attribute partly to tighter monetary conditions and the CBN’s active presence in the FX market.
Many market participants now base their 2026 projections on the assumption that the apex bank will continue to defend exchange rate stability, provided external buffers remain adequate.
Oil market risks cloud FX inflows
Despite the more optimistic currency outlook, analysts warn that risks from the global oil market could weigh on Nigeria’s external position.
Although external reserves have been rising, they remain exposed to fluctuations in crude oil prices, which account for the bulk of Nigeria’s export earnings and FX inflows.
Uncertainty around oil projections is expected to persist into 2026. Elevated geopolitical tensions continue to drive volatility in energy markets, raising concerns around supply disruptions and trade routes.
Analysts project that oil prices could soften toward the $55 per barrel range in 2026, a scenario that would weaken Nigeria’s fiscal revenues and dollar inflows.
PwC also highlighted broader regional risks, noting that political instability and coups across parts of West Africa could disrupt trade, increase risk premia, and reinforce Nigeria’s external vulnerabilities through sanctions, border restrictions, or reduced investor appetite.
Parallel market divergence widens
While the official market remained relatively stable, the naira strengthened slightly in the parallel market, trading around N1,465 per dollar.
The gap between the two segments reflects differing dynamics, with informal markets responding more quickly to speculative pressures and short-term liquidity conditions.
Oil prices rebound on global tensions
In the global commodities market, crude oil prices climbed sharply on Thursday.
Brent crude rose 2.02 per cent to $61.17 per barrel, while US West Texas Intermediate gained 1.95 per cent to trade at $57.05.
Source: Getty Images
The rebound was driven by renewed buying interest and a growing risk premium linked to developments in Venezuela’s oil sector and broader geopolitical tensions.
For Nigeria, sustained strength in oil prices could provide near-term relief for FX inflows, even as longer-term uncertainties continue to shape the naira’s outlook.
CardinalStone predicts N1,350 per dollar for naira in 2026
Legit.ng earlier reported that Nigeria’s naira could post a notable recovery in 2026, appreciating to between N1,350 and N1,450 per dollar, as foreign exchange reforms, improving liquidity and easing inflation begin to reshape the country’s macroeconomic outlook, according to CardinalStone Partners.
The projection is contained in the firm’s 2026 economic outlook report, titled “Indicators Align for Sustained Macro Gains”, released on January 6, 2026.
While the report strikes a cautiously optimistic tone, it also flags risks from weaker global oil prices and rising domestic insecurity.
Source: Legit.ng
