The Nigerian naira extended its early-2026 rally on Tuesday, reaching a monthly high of N1,400.66 per dollar in the official foreign exchange market, as the US dollar continued its broad decline following comments from President Donald Trump.
In the Nigerian Foreign Exchange Market (NFEM), the naira appreciated further from Monday’s close of N1,401.20, maintaining the upward momentum observed since the start of the week. Daily gains have ranged between 0.1% and 0.36% in recent sessions, reflecting improved foreign exchange liquidity and regulatory support from the Central Bank of Nigeria (CBN).
The parallel market showed more restrained movement, with rates quoted between N1,475 and N1,490 per dollar (average buy N1,480, average sell N1,490 as of January 27). The premium between official and informal rates has narrowed compared with earlier volatility, although a gap persists.
The naira’s resilience follows a strong performance in 2025, when it achieved one of its best annual gains in a decade (7–9% against the dollar), supported by higher external reserves, disciplined monetary policy, and increased dollar inflows from oil, remittances, and portfolio investments.
The latest appreciation aligns with a global weakening of the US dollar, which hit its lowest level since early 2022 after President Trump publicly stated he had “no problem” with a declining dollar value. Speaking at a press conference in Iowa, Trump described the drop as “great,” a remark that intensified selling pressure on the greenback.
The US Dollar Index fell as much as 1.2% following the comments, reflecting investor concerns over:
– Potential secondary effects of Trump’s trade policies
– Rising US debt levels and fiscal risks
– Uncertainty surrounding Federal Reserve independence amid Trump’s calls for lower interest rates
The dollar’s slide has been compounded by the Japanese yen’s rebound and repositioning by traders anticipating possible interventions to defend the yen. The combination has driven capital rotation out of US assets and into alternatives such as gold (which has hit record highs) and emerging-market funds — a trend some analysts describe as a “quiet quitting” of dollar holdings.
In Nigeria, the stronger naira offers relief to importers, businesses, and households reliant on foreign exchange for goods, education, and medical expenses abroad. A more stable or appreciating currency also helps contain imported inflation and supports the CBN’s efforts to anchor price expectations.
Analysts expect the naira to remain supported in the near term by steady reserve accretion (currently above $46 billion), improved FX liquidity, and ongoing CBN interventions. However, external risks — including any escalation in US trade or fiscal policies — could influence flows and volatility.
For now, the naira’s midweek strength highlights both domestic policy gains and the unintended boost from a weakening dollar on the global stage. Traders will watch the US Federal Reserve’s upcoming meeting and any further policy signals from Washington for clues on whether the naira’s recent run can extend further into 2026.
