Naira’s Shock Rebound: Inside the Forces Powering Its First Weekly Gain of 2026
- The naira gained N7.68, its first weekly appreciation of 2026 amid improved dollar liquidity
- CBN's increased FX sales and rising external reserves contributed to the naira's market confidence
- Analysts foresee enhanced investor activity and potential naira stability in coming months
After weeks of pressure and cautious sentiment, the naira has delivered an unexpected boost to the market, recording its first weekly gain of 2026 at the official foreign exchange window.
The local currency appreciated by N7.68 over the week, buoyed by improved dollar liquidity and stronger intervention by the Central Bank of Nigeria (CBN), offering a rare dose of optimism to businesses and investors.
Source: Getty Images
Data from the Nigerian Foreign Exchange Market (NFEM) showed that the naira closed on Friday at N1,423.16 per dollar, compared with N1,430.84 at the end of the previous week.
This represents a 0.5 per cent week-on-week appreciation, reversing the bearish trend that dominated trading at the start of the year.
Daily gains add to market confidence
On a day-on-day basis, the naira also strengthened modestly, appreciating by 0.2 per cent from N1,419.71 quoted on Thursday, January 8, 2026.
Over the five trading sessions, the currency gained N6.14, improving from N1,429.30 on Monday, the first trading day of 2026.
Meanwhile, the parallel market remained calm, with the naira trading flat at around N1,490 per dollar.
The stability in the black market suggests reduced speculative pressure, at least in the short term, as official market liquidity improves.
Dollar supply rebounds after sharp slump
Behind the naira’s rebound is a notable recovery in foreign exchange supply. Total FX inflows rose by 38 per cent month on month to $2.8 billion in December 2025, according to FMDQ data.
This marked a rebound from the steep 67 per cent contraction recorded in November.
Despite the improvement, analysts caution that December’s supply level still ranks as the second weakest in the past 16 months, underlining lingering fragilities in Nigeria’s FX inflows.
Corporate inflows dipped by 5 per cent to $420 million, but other supply sources recorded notable gains.
CBN steps up market support
Analysts at FBNQuest attributed much of the recovery to increased FX sales by the CBN. The apex bank sold $654 million into the market in December, more than double the $318 million recorded in November.
This stronger presence helped ease liquidity constraints and calm volatility at the official window.
Foreign portfolio inflows also edged up by 7 per cent to $632 million, though this was far below the $3.5 billion recorded in October.
The slowdown reflects typical year-end caution, as offshore investors reduce exposure and rebalance portfolios.
Reserves rise, inflows show mixed signals
Nigeria’s external reserves strengthened further, rising to $45.66 billion as of January 7, 2026, from $45.50 billion at the end of December. The increase gives the CBN more room to manage exchange rate pressures and intervene when needed.
On the positive side, foreign direct investment surged by over 380 per cent to $50.1 million, while inflows from exporters, importers, and individuals rose sharply.
Source: Getty Images
Analysts expect improved investor activity in the coming months, supported by attractive carry trade opportunities and sustained policy support, factors that could help the naira build on this early momentum.
Naira records first loss in 2026 as CBN sells dollar
Legit.ng earlier reported that the naira recorded its first loss of 2026, slightly depreciating against the US dollar in the foreign exchange market.
According to the CBN data at the Nigerian Foreign Exchange Market, the naira fell by 0.1% on Thursday, January 8, with the dollar quoted at N1,419.71, compared with N1,418.26 on Wednesday, January 7.
In the parallel market, the currency was unchanged at N1,490 to the dollar.
Source: Legit.ng
