The Nigerian naira maintained its recent momentum against the United States dollar on Thursday, January 29, 2026, opening the trading session at approximately ₦1,395.09 per dollar at the official foreign exchange window. The steady performance extends a week-long recovery that has seen the local currency claw back ground after weeks of volatility.
Market analysts say the naira’s resilience reflects improved liquidity conditions and sustained policy interventions by the Central Bank of Nigeria (CBN), which appear to be restoring a measure of confidence among investors and traders.
Official Market: Naira Holds Firm
Trading activity at the Nigerian Foreign Exchange Market (NFEM) showed only mild fluctuations during the session. By mid-morning, the exchange rate settled around ₦1,396.98 per dollar, confirming that the naira has remained below the psychologically important ₦1,400 threshold for the first time in several weeks.
Market watchers describe the trend as cautiously bullish. The strengthening is attributed largely to reforms in the FX trading architecture, particularly the CBN’s Electronic Foreign Exchange Matching System (EFEMS). The system, designed to improve transparency and price discovery, has reportedly helped reduce FX backlogs and align supply more efficiently with demand.
In addition, Nigeria’s improving foreign reserve position has provided a buffer against sudden shocks, allowing the apex bank to intervene more confidently when necessary. Dealers say this combination has created a more predictable trading environment, reducing panic-driven demand.
Parallel Market: Gap Narrows Gradually
In the parallel market—often used for cash-based transactions and small-scale imports—the dollar exchanged between ₦1,468 and ₦1,480 across major cities including Lagos, Abuja, and Kano.
Although the gap between the official and informal rates remains significant, it has narrowed compared to levels recorded earlier in January. Bureau de Change (BDC) operators say retail demand driven by travel, school fees, and limited imports persists, but speculative hoarding has eased.
This moderation in speculative activity, analysts note, suggests growing confidence that the naira may not experience sharp short-term depreciation, reducing incentives for panic buying.
Market Snapshot
- Official Opening Rate (NFEM): ₦1,395.09
- Official Mid-Session Rate (NFEM): ₦1,396.98
- Parallel Market Range: ₦1,468 – ₦1,480
Background: From Volatility to Stability
Nigeria’s currency has faced sustained pressure over the past year due to factors including FX shortages, backlog of unmet demand, declining oil output at various points, and global tightening of financial conditions. These challenges widened the gap between official and parallel market rates, undermining confidence.
Recent policy adjustments—such as stricter FX market rules, clearing of verified FX obligations, and tighter monitoring of speculative trading—appear to be gradually stabilising the situation. While the naira remains far weaker than historical levels, the current trend marks a pause in rapid depreciation.
Why This Matters
The naira’s stability has broad implications for the Nigerian economy:
- Inflation Control: A steadier exchange rate can help slow imported inflation, especially for food, fuel, and manufactured goods.
- Business Planning: Predictable FX pricing allows businesses to plan imports, pricing, and investment with less uncertainty.
- Investor Sentiment: Sustained stability may encourage foreign portfolio inflows and ease pressure on external reserves.
- Household Impact: Reduced volatility lowers the risk of sudden price spikes that affect everyday consumers.
Economists caution, however, that stability must be sustained over time to translate into real economic relief.
What to Watch Next
Looking ahead, analysts remain moderately optimistic about the naira’s near-term outlook. If crude oil production and export receipts remain steady, and the CBN maintains its current intervention strategy, the currency could continue to trade within the ₦1,390–₦1,400 band at the official window.
Market participants are closely watching end-of-week data and reserve movements, which could shape sentiment going into February’s trading sessions. Any policy signals from the CBN will also be scrutinised for clues about the next phase of FX management.
For now, the naira’s ability to “hold the line” below ₦1,400 is being seen as a small but significant win in Nigeria’s ongoing battle for currency stability.
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