Dollar Is Crashing: Naira Maintains Gain, Hits Intraday High of N1,358 in Official Window
- The naira strengthened to ₦1,358 per dollar, its best performance in 24 months, according to data from the Central Bank of Nigeria (CBN)
- Improved dollar liquidity and investor sentiment boostED the naira's exchange rate in the official window
- The local currency's rally subsequently eased pressure on importers, enhancing economic confidence
The naira sustained its upward momentum against the US dollar on Wednesday, February 4, 2026 strengthening further in the official foreign exchange market amid rising dollar supply and improved investor sentiment.
At the Central Bank of Nigeria’s foreign exchange window, the local currency climbed to an intraday high of ₦1,358 per dollar, its strongest position since the introduction of sweeping FX reforms.
Source: Getty Images
This marks the naira’s best performance in roughly 24 months and signals growing confidence in Nigeria’s foreign exchange framework.
Market checks also confirmed that the appreciation extended beyond the official window, with gains recorded in the parallel market, reinforcing the breadth of the rally.
Liquidity boosts confidence at CBN FX window
According to Central Bank FX data, the naira strengthened by 1.08 per cent to close at ₦1,358.28 per dollar on Wednesday, January 4, 2026.
The appreciation was driven largely by robust US dollar liquidity, which adequately met international payment demands from businesses and financial institutions.
Analysts noted that foreign exchange supply from exporters, non-bank corporates, and foreign portfolio investors helped stabilise the market and ease pressure on the local currency.
“The local currency appreciation has been majorly driven by increased foreign portfolio investment inflows, exporters, and non-bank corporate supply at the official window,” analysts told MarketForces Africa.
“In addition, the steady accretion of external reserves has enhanced the central bank’s capacity to defend the naira.”
Parallel market reflects improved sentiment
The naira also posted gains in the informal market, appreciating by 0.87 percent to trade around ₦1,431 per dollar.
The movement mirrors improved sentiment across both regulated and unregulated segments of the FX market, a sign that confidence is returning to Nigeria’s currency ecosystem.
Currency traders say the narrowing gap between official and parallel rates reflects better price discovery, reduced speculative demand, and a more transparent FX environment following reforms.
Investors, oil revenue drive outlook
Market participants are increasingly optimistic about the naira’s near-term trajectory.
Current forecasts suggest the exchange rate could strengthen further to between ₦1,300 and ₦1,350 per dollar in the first quarter of 2026.
This outlook is anchored on sustained foreign portfolio investment, as global investors convert dollars to naira to take advantage of attractive yields in Nigeria’s financial markets.
Rising crude oil prices and improved oil output have also boosted dollar inflows, supporting external reserves.
Nigeria’s growing FX buffers are seen as critical in cushioning the currency against external shocks and maintaining stability.
Importers enjoy cost relief
The naira’s rally is already easing pressure on import-dependent companies. Businesses with foreign obligations are taking advantage of the stronger exchange rate, as fewer naira are now required to settle dollar-denominated payments.
Economists say continued currency stability could help moderate imported inflation, improve corporate planning, and strengthen overall macroeconomic confidence.
Source: Getty Images
As dollar supply deepens and investor interest remains firm, the naira’s renewed strength is reshaping expectations in Nigeria’s foreign exchange market.
According to Janet Ogochukwu, senior banker and economist, the foreign exchange reserves is a strong buffer for the naira.
"At over $46 billion, the FX reserves remains the naira's firepower against depreciation. Also, oil earnings have boosted Nigeria's reserves position," she said.
Traders sell dollars at new rate in official window
Legit.ng earlier reported that the naira recorded a broad-based rally on Thursday, January 15, 2026, strengthening against the US dollar in both the official and parallel foreign exchange markets.
The appreciation reflects easing demand pressures and renewed optimism around Nigeria’s economic outlook as recent reforms begin to show measurable impact.
During intraday trading, the exchange rate touched a low of N1,418 per dollar, supported by the absence of major international payment pressures.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
