Naira Starts New Week on a High as Reserves Surge, Confidence Returns to FX Market
- The naira strengthened by 1.5% following rising external reserves boosting confidence in forex markets
- The parallel market rates also held steady as speculative pressure eased and sentiment improves
- Nigeria's external reserves climbed to $46.91 billion, enhancing the country's capacity for foreign obligations
The naira opened the new trading week on a stronger footing, extending gains recorded at the close of last week as rising external reserves lifted confidence across Nigeria’s foreign exchange markets.
Data from the Central Bank of Nigeria showed the local currency appreciated by 1.5 per cent week on week at the Nigerian Foreign Exchange Market, reflecting sustained demand-supply balance improvements.
Source: Getty Images
Parallel market holds steady
At the official market, the naira closed at N1,366.19 per dollar on Friday, up from N1,386.55 at the end of the previous week, which marked the final trading session of January 2026.
The performance capped a steady rally over five trading days, with the currency strengthening from N1,390.36 per dollar on Monday to its strongest weekly close on Friday.
On a day-to-day basis, movements were largely stable. The naira depreciated marginally by 13 kobo from N1,366.06 recorded on Thursday, indicating relative calm in official trading despite ongoing market adjustments.
In the parallel market, commonly referred to as the black market, the naira remained unchanged throughout the week. Street traders quoted the currency at N1,450 per dollar, suggesting that the gap between official and unofficial rates did not widen further.
The stability points to easing speculative pressure and improved sentiment among market participants.
External reserves climb to a new high
Nigeria’s external buffers continued their upward trend, offering fresh support to the currency.
Gross external reserves rose to $46.91 billion as of February 5, 2026, compared with $46.70 billion on January 29, according to CBN figures.
The steady increase highlights the country’s improved capacity to meet foreign obligations and intervene in the FX market when necessary.
FX inflows improve as outflows shrink
Further backing the naira’s performance, net foreign exchange inflows rose significantly in the third quarter of 2025.
Net inflow climbed to $17.46 billion, up from $14.46 billion in the preceding quarter, largely driven by a sharp reduction in FX outflows.
While aggregate FX inflow declined by 4.17 per cent to $26.27 billion, total outflow fell by a much steeper 32.01 per cent to $8.80 billion.
Source: Getty Images
Banking channel outflows dropped sharply, resulting in a net inflow of $5.17 billion, a dramatic improvement from near-flat levels in the previous quarter.
Together, stronger reserves, reduced outflows, and steady market confidence are helping to anchor the naira as it begins the new week on a positive note.
Exchange rate gap grows as naira falls
Legit.ng earlier reported that Nigeria’s exchange-rate convergence drive is facing renewed pressure as the gap between the official and parallel markets widens beyond 6 per cent, reviving concerns about speculative activity and FX arbitrage.
Data from the Central Bank of Nigeria (CBN) and surveys of parallel market traders show that the disparity stood at about 6.4 per cent mid-week, equivalent to roughly N94.
The gap had briefly crossed the N100 mark toward the end of January, underscoring persistent liquidity frictions in the foreign exchange market.
Source: Legit.ng
