The naira recorded a mild depreciation at the official foreign exchange market in the second week of January 2026, closing at N1,421 per dollar on Wednesday.
This is according to data published on the Central Bank of Nigeria (CBN) website on Wednesday.
The movement comes as analysts continue to point to stronger reserve buffers, FX reforms, and structural improvements expected to support exchange rate stability heading into 2026.
The currency had traded at N1,416/$ on Tuesday and N1,428/$ on Monday, making Wednesday’s close the first notable mid-week slip in the second week of the year.
What the data is saying
Official market data shows that the naira’s mid-week movement remains within a narrow band, suggesting moderated volatility compared to previous years.
Earlier, Nairametrics reported that the naira weakened to N1,431/$ on January 2, 2026, the first trading day of the year, reflecting post-holiday FX demand and lingering supply adjustments.
At the parallel market, the naira traded weaker, averaging between N1,490 and N1,495 per dollar on Wednesday, compared with N1,470/$ the previous day.
The widening spread between the official and informal markets continues to reflect unmet demand for FX, particularly for travel allowances, imports, and other invisible transactions.
Despite this gap, market watchers note that the scale of volatility has moderated significantly, pointing to improving confidence in Nigeria’s evolving foreign exchange framework.
More context on reserves and supply-side support
Nigeria’s foreign exchange reserves rose slightly to $45.62 billion on Tuesday, up from $45.60 billion on Monday, offering additional support to the naira.
According to the CBN, reserves are projected to rise to about $51.04 billion in 2026, from an estimated $45.01 billion in 2025, supported by easing FX pressures, higher oil earnings, sovereign bond issuances, and increased diaspora remittance inflows.
The apex bank also highlighted developments in the domestic refining sector as a key structural support.
The Dangote Refinery’s expansion of its nameplate capacity to 700,000 barrels per day from 650,000 barrels per day in 2025, with a medium-term target of 1.4 million barrels per day, is expected to significantly reduce Nigeria’s dependence on refined fuel imports.
This should, in turn, support reserve accumulation and reinforce stability in the FX market.
Economists say these factors collectively strengthen the medium- to long-term outlook for the naira, even as short-term fluctuations persist.
Speaking to Nairametrics, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), described the 2026 exchange rate outlook as largely positive, citing Nigeria’s strong external reserves as a critical anchor.
“The prospects for the stability of the naira are quite bright. This is largely because our foreign reserves are very strong, and reserves play a critical role in determining the strength and stability of any currency,” Yusuf said.
What you should know
In its 2026 macroeconomic outlook, CardinalStone projected that naira could strengthen to between N1,350 and N1,450 per dollar in 2026.
Nairametrics reports that the naira weakened slightly to N1,431 per dollar at the official foreign exchange market on the first trading day of 2026.
