Naira opened the second week of January 2026 with mixed signals at the official foreign exchange market.
On Wednesday, it closed at ₦1,421 per dollar, according to data from the Central Bank of Nigeria (CBN).
Earlier in the week, the currency traded at ₦1,428/$ on Monday before strengthening to ₦1,416/$ on Tuesday.
However, Wednesday’s weaker close still stayed within a tight range, signalling calmer market conditions.
Naira Opens Week Under Pressure
Overall, analysts say the limited movement reflects growing stability driven by reforms and stronger economic buffers.
As a result, they expect these factors to anchor the exchange rate throughout 2026.
At the start of the year, the market faced mild pressure.
On January 2, 2026, the naira weakened to ₦1,431/$ as post-holiday FX demand increased.
Since then, trading patterns have suggested a more balanced and orderly market.
Notably, volatility has remained lower than levels recorded in previous years.
Parallel Market Gap Persists
In contrast, pressure remains more visible in the parallel market.
On Wednesday, traders exchanged the naira between ₦1,490 and ₦1,495 per dollar.
This compared with ₦1,470/$ recorded the previous day.
Consequently, the widening gap reflects unmet FX demand for travel, imports, and invisible transactions.
Even so, analysts say overall volatility has reduced significantly.
Read Also: Cardinal Stone Sees Naira At ₦1,350– ₦1,450/$ In 2026
They link this improvement to better FX management and rising market confidence.
Reserves And Reforms Lift Outlook
Meanwhile, external reserves continue to support the naira.
On Tuesday, Nigeria’s FX reserves rose slightly to $45.62 billion.
This marked an increase from $45.60 billion recorded on Monday.
Looking ahead, the CBN projects reserves could reach $51.04 billion in 2026.
This compares with an estimated $45.01 billion in 2025.
Importantly, higher oil earnings and diaspora remittances support this outlook.
In addition, sovereign bond issuances should help ease FX pressures.
Structural changes in domestic refining have also strengthened market sentiment.
For instance, the Dangote Refinery expanded capacity to 700,000 barrels per day from 650,000 bpd in 2025.
It now targets 1.4 million barrels per day in the medium term.
As a result, the expansion should reduce Nigeria’s reliance on imported refined fuel.
Lower imports would therefore conserve foreign exchange and support reserves.
Accordingly, economists say these factors improve the naira’s medium-term outlook.
However, they still expect short-term fluctuations to persist.
Speaking on the outlook, Dr Muda Yusuf of the CPPE described 2026 as largely positive.
He cited strong foreign reserves as a key stabilising factor.
Similarly, CardinalStone projects the naira could trade between ₦1,350 and ₦1,450 per dollar in 2026.
For now, the currency remains under pressure but stands on steadier footing.
