Naira Stabilizes in Q1 2026, Trading Between N1,340 and N1,430 to the Dollar
The naira maintained relative stability in the first quarter of 2026, trading within a narrow band of N1,340 to N1,430 against the US dollar in Nigeria’s official foreign exchange market. This development was disclosed by the Centre for the Promotion of Private Enterprises (CPPE) in its recent economic review, which also offered insights into the country’s macroeconomic outlook for the coming months.
According to Muda Yusuf, Chief Executive Officer of CPPE, the exchange rate stability during the January to March period was underpinned by improved external reserves, which reached approximately $50 billion as of March 11, 2026. The relative calm in the forex market helped moderate imported inflation and contributed to a modest restoration of business confidence, particularly among investors wary of currency volatility.
Despite the gains in exchange rate management, Yusuf cautioned that Nigeria’s cost-of-living crisis remains severe. High energy costs, persistent insecurity, and deep-seated structural constraints continue to weigh on household incomes and business productivity. These challenges, he noted, have not abated despite the currency’s improved performance.
Looking ahead to the second quarter, the CPPE chief described the outlook as cautiously optimistic but underscored several risks. Geopolitical tensions involving Iran, the United States, and Israel could trigger external shocks, while the intensifying political cycle ahead of the 2027 general elections may affect policy continuity and reform momentum.
Yusuf also advised the Central Bank of Nigeria to hold off on further monetary tightening, warning that additional interest rate hikes could exacerbate inflationary pressures on consumers already grappling with high living costs.
The Q1 performance marks a notable shift from the substantial volatility witnessed during Nigeria’s exchange rate reform transition period. While the stability is a positive signal, sustained progress will depend on addressing structural bottlenecks and insulating the economy from both domestic and global uncertainties.
