N1,396: Experts Explain Why Naira Is Appreciating as Dollar Crashes
- Naira is on the rise and analysts have shared their opinions on the expected impact on Nigerians
- The analysts noted that naira’s rally reflects growing confidence in the country’s macroeconomic policies
- Rising confidence in Nigeria’s economy is also supported by stronger foreign exchange inflows
Legit.ng journalist Dave Ibemere has extensive experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The value of Nigerian currency has surge to a two-year high, a big boost for the Nigerian economy on the path to recovery.
Data from the Central Bank of Nigeria (CBN) showed that the naira strengthened to N1,396.99 per dollar in the official foreign exchange market on Thursday, January 29.
Source: Getty Images
The latest rate is the strongest performance since 2024 and a N264.13, an 18.91% gain when compared to N1,616.12 as at December 2024
On a day-to-day basis, it rose N3.49 or 0.25% from Wednesday’s N1,400.48, with intraday bids ranging between N1,367 and N1,385 per dollar.
In the parallel market, traders also told Legit.ng that the naira has improved.
Abdullahhi a trader said:
"We sold the dollar at N1,470 on Thursday and Friday morning. previously our rate was N1,485 to N1,490".
What this means is that the naira has gained N70 to N1,470 per dollar, representing a 4.76% increase from December 2024.
Experts speak on Why naira is appreciating
Reacting to latest naira movement, experts has attributed the rally to the weakened dollar.
The Guardian reports that The US currency has fallen to its lowest level in four years after former President Donald Trump downplayed concerns about the decline, prompting investors to move into safe-haven assets like gold and the Swiss franc.
Charlie Robertson, author of The Time Travelling Economist, said:
“A weak dollar is dislocating many markets, but it is good for Africa, as we are seeing with the naira.”
Source: Getty Images
Manpreet Gil, Chief Investment Officer for Africa, Middle East, and Asia at Standard Chartered, noted that the weaker dollar creates a favorable environment for capital inflows into emerging and frontier markets, strengthening both equity and bond markets across Africa.
Other factors supporting the naira include stable oil production, rising oil prices, higher remittances, Eurobond proceeds, and improved foreign exchange governance, BusinessDay reports.
Nigeria’s external reserves rose by $5.82 billion or 14.45 percent to $46.11 billion as of January 28, 2026, from $40.29 billion in December 2024.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said the currency’s strength signals confidence in ongoing economic reforms.
He said.
“As long as the reforms continue and we avoid major shocks, especially from oil, the outlook remains sustainable."
FX reserves hit 8-year high
Earlier, Legit.ng reported that Nigeria’s foreign exchange reserves have climbed to their highest level in eight years, offering renewed optimism for the naira and strengthening the country’s external buffers amid ongoing economic reforms.
Data from the Central Bank of Nigeria (CBN) shows that gross external reserves rose to $46.012 billion as of January 22, 2026, marking an increase of about $510 million since the start of the year.
This level was last recorded in August 2018, underscoring a notable turnaround in Nigeria’s external position.
Source: Legit.ng
