After months of volatility and subdued sentiment, Nigeria’s naira is beginning to show signs of resilience, quietly regaining ground against the US dollar and offering a rare dose of optimism in the foreign exchange market.
By the close of trading on Friday, the naira strengthened by about 0.39 per cent on the parallel market, reflecting improving dollar supply and firmer liquidity conditions. In the official window, the currency settled at N1,430 to the dollar, up from N1,435 recorded a day earlier, extending a steady rebound that has gathered pace in recent weeks.
Operators in the informal market confirmed the trend. Bureau de Change dealers reported slightly lower dollar prices compared with previous sessions. According to Abdullahi, a BDC trader, the dollar was being bought at around N1,470 and sold at N1,475—an improvement from rates seen earlier in the month, when the greenback traded closer to N1,480.
The recent gains mark a notable shift for a currency that spent much of the past two years under intense pressure. After repeatedly ranking among Africa’s weakest-performing currencies, the naira finally exited the bottom tier in October 2025. By year-end, it had consolidated its position outside that group, even trading stronger than some regional peers, including the Rwandan franc.
Central Bank of Nigeria data further highlights the turnaround. The naira has appreciated by about 6.5 per cent year-on-year, recovering from levels above N1,535 per dollar at the same point last year. While final rankings are still being compiled, early indications suggest the currency closed 2025 among Africa’s top 15 to 20 performers—a significant improvement from its recent lows.
Support for the currency has also come from Nigeria’s rising external buffers. As of December 30, 2025, foreign exchange reserves climbed to a six-year high of approximately $45.48 billion, up from about $40.88 billion a year earlier. Analysts say the stronger reserve position has helped improve market confidence and provided the central bank with more room to manage FX pressures.
Still, the outlook is not without risks. Some economists caution that 2026 could test the naira’s resilience, citing concerns over softer global oil prices and the possibility of further monetary easing. Citibank economist David Cowan has warned clients that these factors could push the currency back toward the N1,650–N1,700 range if pressures intensify.
For now, however, the naira appears to have found firmer footing. As Nigeria heads into 2026, investors and businesses alike will be watching closely to see whether this renewed stability evolves into a sustained recovery—or merely a brief pause in an otherwise challenging journey for the local currency.
