The Nigerian naira strengthened to its highest level against the US dollar in two years on the official foreign exchange market, reflecting a period of sustained appreciation supported by rising external reserves. Data from the Central Bank of Nigeria (CBN) indicated the currency appreciated to N1,396.99 per dollar on Thursday, marking its best performance since the implementation of the Electronic Foreign Exchange Matching System (EFEMS).
This represented a day-on-day gain of N3.49 for the naira, continuing a four-day sequence of positive rallies at the official market. The Electronic Foreign Exchange Matching System, introduced to enhance transparency and liquidity in the foreign exchange market, has been operational since mid-2023. The consistent upward movement follows a period of significant depreciation for the national currency.
Concurrently, the parallel or black market rate also improved. The naira gained N5 against the dollar in that segment, closing at N1,480 per dollar on Thursday, down from N1,485 the preceding day. While the official and black-market rates remain disparate, the narrowing gap suggests a convergence influenced by the apex bank’s interventions and improved market sentiment.
The appreciation aligns with a notable increase in Nigeria’s external reserves. According to CBN statistics, gross reserves rose to $46.11 billion as of January 28, 2026, up from $46.04 billion recorded on January 26. This upward trajectory in reserve levels provides the central bank with greater capacity to defend the naira and meet legitimate foreign exchange demand, contributing to the currency’s firming.
The sustained gains in the official forex window and the accretion to external reserves point to a phase of relative stability for the naira. Analysts note that consistent reserve growth is a critical buffer that can bolster investor confidence and help moderate exchange rate volatility. The performance underscores the impact of the CBN’s monetary policy tools, including the EFEMS platform, on managing currency dynamics.
Moving forward, the trajectory of the naira will depend on the continuity of reserve accumulation, the effectiveness of forex allocation through official channels, and broader developments in the global oil market, which significantly influences Nigeria’s dollar earnings. The narrowing spread between official and parallel market rates may also reduce arbitrage opportunities if the trend persists.
