The naira strengthened to N1,349.5 per US dollar on Tuesday, making it the first time it traded below the N1,350/$ mark since May 29, 2024.
Data from the official foreign exchange market showed the local currency improved from N1,354.9 per dollar recorded on Monday.
The latest appreciation reflects sustained gains in the official market and comes amid rising external reserves and expectations ahead of the Central Bank of Nigeria’s upcoming Monetary Policy Committee meeting.
In contrast, the parallel market rate remained weaker, highlighting mild but persistent pressure in the unofficial segment of the foreign exchange market.
The development underscores the ongoing efforts to stabilize the naira while narrowing the gap between official and street rates.
What the data is saying
The naira closed at N1,349.5 per dollar in the official market on Tuesday, strengthening from N1,354.9 per dollar recorded the previous day.
- This marks the first time the currency has traded below the N1,350 threshold since May 29, 2024, when it was quoted at N1,329.65 per dollar.
- The parallel market rate stood at N1,443.68 per dollar on Tuesday, compared to N1,443.40 per dollar on Monday.
The improving reserve position and sustained gains in the official window point to stronger foreign exchange liquidity conditions in the market.
More Insights
Analysts attribute the recent appreciation of the naira to stronger foreign exchange inflows and improved market confidence.
Dr. Joseph Mbada, an Abuja-based economist, said the appreciation reflects improved liquidity in the official foreign exchange market.
- According to him, “The strengthening of the naira below N1,350 per dollar indicates that supply conditions in the official window have improved significantly. This is largely a function of better inflows and tighter monetary conditions, which have helped moderate speculative demand.”
- Increased liquidity in the official window has helped ease volatility and support price stability.
- The rise in external reserves has been supported by higher oil export earnings.
- Remittance inflows and portfolio investments have also contributed to improved dollar supply.
The narrowing gap between official and parallel market rates signals relatively improved market alignment.
Experts note that stronger reserves provide the CBN with additional buffers to manage volatility and defend the currency when necessary.
What you should know
The recent movement in the exchange rate comes ahead of the Central Bank of Nigeria’s 304th Monetary Policy Committee meeting scheduled for February 23–24, 2026. Policymakers are expected to assess inflation trends, liquidity conditions, and developments in the foreign exchange market.
- At its November 2025 meeting, the MPC retained the Monetary Policy Rate at 27 per cent.
- In September 2025, the committee reduced the rate by 50 basis points from 27.5 per cent to 27 per cent.
The current stance reflects a tight monetary policy aimed at curbing inflation and stabilizing the naira
