The Nigerian naira delivered a robust performance in the foreign exchange market during the week ending February 20, 2026, appreciating notably in both official and parallel segments amid improved dollar supply, rising external reserves, and policy measures enhancing retail liquidity.
In the parallel (black) market, the naira closed at N1,340 per US dollar on Friday, reflecting an N80 appreciation from the previous week’s level of N1,420—a weekly gain of nearly 6%. Over the five-day period, it strengthened by approximately N40 from Monday’s N1,380 quote, equating to roughly 3% improvement. Traders reported significant pressure on dollar holders, many of whom purchased at higher rates earlier and now faced losses as the currency retreated.
The official Nigerian Foreign Exchange Market (NFEM) saw the naira gain N9.10 week-on-week, closing at N1,346.32 per dollar—a 0.7% improvement from the prior Friday’s N1,355.42. Daily movements showed minor volatility, with a slight N4.97 (0.4%) depreciation from Thursday’s N1,341.35, but the overall trend remained positive.
This convergence narrowed the premium between official and parallel rates to around N6 (about 0.4–0.5%), approaching levels not seen in recent years and marking a significant step toward market unification. At one point during the week, the parallel rate hit a multi-year peak convergence, dipping as low as N1,345—its strongest showing in three years.
Supporting the naira’s resilience, Nigeria’s external reserves continued their upward trajectory, reaching approximately $48.50 billion by mid-February 2026, up from levels around $45–46 billion earlier in the year. This build-up enhances the Central Bank of Nigeria’s (CBN) capacity to intervene and maintain stability if needed.
A key driver of the recent momentum has been the CBN’s policy allowing licensed Bureau de Change (BDC) operators to access foreign exchange directly from the NFEM. Taiwo Ebenezer, South-West Chairman of the Association of Bureau De Change Operators of Nigeria (ABCON), attributed part of the gains to this measure, which provides BDCs with a stable, official source of dollars. Operators are finalising modalities to commence purchases from commercial banks, with expectations that trading could begin soon—potentially capped at $150,000 weekly per BDC to prevent hoarding and ensure orderly distribution.
The influx of dollars through this channel is expected to further ease pressure in the retail segment, reduce arbitrage opportunities, and support continued naira appreciation. Market participants remain optimistic that sustained inflows, combined with the CBN’s proactive liquidity management, could keep the currency firm in the near term.
While short-term fluctuations persist, the week’s developments signal strengthening confidence in Nigeria’s forex framework, driven by policy reforms, reserve accumulation, and improved supply dynamics.
