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Nigeria’s currency, naira, is staging a quiet but significant comeback.
On Tuesday, the naira strengthened to N1,349.5 per dollar in the official foreign exchange market, the first time it has traded below the N1,350 threshold since May 29, 2024, when it was quoted at N1,329.65. The gain marks a notable shift in momentum for the local currency, which closed at N1,354.9 per dollar on Monday.
The move signals improving liquidity conditions in the official window and renewed confidence among market participants, even as the parallel market remains under mild pressure. On Tuesday, the street rate stood at N1,443.68 per dollar, slightly weaker than Monday’s N1,443.40, underscoring a persistent, though narrowing, gap between the two segments.
Behind the rebound is a strengthening external reserves position and rising dollar inflows into the economy. Higher oil export earnings, steady remittance flows and increased portfolio investments have bolstered supply in the official market, easing volatility and reducing speculative demand.
Analysts say the appreciation reflects more than short-term market adjustments.
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Dr. Joseph Mbada, an Abuja-based economist, said the development points to improved liquidity dynamics. “The strengthening of the naira below N1,350 per dollar indicates that supply conditions in the official window have improved significantly. This is largely a function of better inflows and tighter monetary conditions, which have helped moderate speculative demand,” he said.
The improved reserve buffer also gives the Central Bank of Nigeria (CBN) greater room to intervene when necessary, helping to defend the currency against sudden shocks. Market watchers note that a steady reserve build-up often reassures investors and signals policy credibility.
The timing of the appreciation is particularly significant as it comes ahead of the CBN’s 304th Monetary Policy Committee (MPC) meeting scheduled for February 23–24, 2026. Policymakers are expected to review inflation trends, liquidity conditions and developments in the foreign exchange market as they weigh their next move.
At its November 2025 meeting, the MPC retained the Monetary Policy Rate at 27 per cent, maintaining a tight stance aimed at curbing inflation and stabilizing the currency. Earlier, in September 2025, the committee trimmed the rate by 50 basis points from 27.5 per cent to 27 per cent.
With tighter monetary conditions still in place and dollar supply improving, the latest exchange rate movement suggests that the CBN’s stabilisation strategy may be gaining traction. For now, the breach of the N1,350 mark offers a psychological boost, and a sign that the naira’s recovery narrative is gathering pace.
