The Nigerian Naira continued to gain ground against the US dollar during the midweek trading session.
In the official market, the naira maintained the appreciation trend seen since the start of the week.
The local currency hit monthly highs in the Nigerian Foreign Exchange Market (NFEM), where the exchange rate settled at about N1,400.66 per dollar.
The currency had already made significant gains in the previous session, ending at N1,401.2/$.
The parallel market, also known as the black market, responded more calmly amid the official foreign exchange market’s quick gains.
Analysts observe that the local currency premium decreased compared to naira volatility, even though the difference between the official and parallel rates still exists.
The naira has been appreciated in a few sessions daily (up 0.1%-0.36% on some days). The parallel market (informal rates in Lagos BDC) is between N1,475/$ and N1,490/$ (the average buy is N1,480/$ and the average sell is N1,490/$ as of January 27), so the buy/sell spreads are reported.
The parallel rates have improved as the CBN has implemented further regulatory reforms, and the FX liquidity has improved.
The naira has continued to appreciate in early 2026, keeping the momentum it established in 2025 (the naira enjoyed a decade high performance of 7%-9% against the USD in 2025).
U.S dollar index hit lowest level since 2022Â
The dollar was on a meltdown shortly after the U. S President’s remark. President Donald Trump disclosed he had no problem with the declining value of the dollar, which has now reached a new low since early 2022.
During a press conference in Iowa, Trump was asked if he was concerned about the dollar’s decrease in value, to which he replied, “No. I think it’s great. I think the value of the dollar was great”. These remarks come as the dollar has been on a steady decline, dropping further as investors fear the secondary effects of Trump’s trade policy in the US, which has been kind to domestic business.
- After Trump’s remarks, the dollar index fell as much as 1.2%, making the dollar weaker than the world’s other fiat currencies.
- Continuous drops in the dollar also indicated growing concerns that the United States has a debt problem. The Secretary of the Treasury, Scott Bessent, has preached that the dollar itself is an asset just like any other.
- Essentially, if countries trade with the US, they must add dollar reserves to their inventory, thus bringing new meaning to the word “value.” However, based on recent comments from Trump, shorting the dollar is justified.
The American dollar’s decline can in part be put down to the Japanese yen’s abrupt rebound since last week. Dollar-yen traders have positioned for interventions to defend the Japanese currency.
Trump’s policies affecting Dollar
The dollar slide has also been driven by Trump’s erratic and brash policymaking that has concerned and upset both foreign allies and investors. His takeover threats on Greenland, bullying of the Fed, deficit-fed tax cuts, and polarizing US leadership have all contributed to the political instability within the United States.
- The American dollar’s weakness has persisted despite rising US government bond yields and expectations that the Fed will pause its interest rate cuts at its meeting on Wednesday. U.S President Trump has stated that he wants interest rates to be lower, which will add even more pressure on the dollar.
- That has helped push investors into alternative stores of value such as gold, sending bullion to record highs, in what’s becoming known as the debasement of trade.
They are also investing in asset classes such as emerging-market funds at a record-breaking pace as momentum builds for a rotation out of US holdings more broadly, a move some have called a quiet quitting.
