The Naira began the first trading session of 2026 with a positive performance against the US Dollar, signaling an optimistic start for the Nigerian Foreign Exchange Market. At the official NAFEX window, the Naira appreciated by N4.91, a 0.34 per cent gain, to close at N1,430.85 per dollar, a notable improvement from the previous rate of N1,435.76. This upward trend was also observed against other major currencies, with the Naira chalking up N8.47 against the British Pound Sterling, closing at N1,925.78, and gaining N9.64 against the Euro to trade at N1,678.24.
In parallel markets, the Nigerian currency also showed strength. The black market window saw the Naira firm up by N5 against the Dollar, selling at N1,475/$1 compared to N1,480/$1 previously. Similarly, at the GTBank counter, it improved against the greenback by N17, settling at N1,435/$1 from N1,452/$1.
What is the outlook for Nigeria’s foreign exchange market in 2026? The Central Bank of Nigeria (CBN) anticipates that reforms will enhance efficiency and transparency, narrow the premium between official and parallel market rates, and sustain exchange rate stability. Furthermore, improved domestic oil refining capacity is expected to significantly reduce the demand for foreign exchange for fuel imports, further bolstering the Naira.
The CBN projects Nigeria’s external reserves to climb to $51.04 billion in 2026, a substantial increase from $45 billion in 2025. This growth is expected to be driven by reduced pressure in the FX market, anticipated rises in oil earnings, sovereign bond issuances, and robust diaspora remittance inflows.
Regarding inflation, the CBN forecasts a further deceleration in headline inflation to 12.94 per cent in 2026. This downward trend is expected to continue, reaching 10.75 per cent by 2027, influenced by a confluence of economic factors.
In the cryptocurrency sphere, Ripple (XRP) surged above $2, marking its first achievement since mid-December and continuing a strong start to 2026. This rally is attributed by traders to steady spot exchange-traded fund (ETF) inflows and a more favorable regulatory sentiment emerging in the US.
Traders are closely monitoring the evolving regulatory landscape. The departure of SEC Commissioner Caroline Crenshaw, a notable critic of crypto spot ETFs, is viewed by some market participants as potentially paving the way for more crypto-supportive policies in the United States.
Other cryptocurrencies also experienced significant gains. Dogecoin (DOGE) rose by 9.1 per cent to $0.1400, Cardano (ADA) grew by 7.9 per cent to $0.3856, and Litecoin (LTC) jumped by 2.5 per cent to $81.37. Solana (SOL) added 2.4 per cent, trading at $130.35.
Ethereum (ETH) appreciated by 1.8 per cent, closing at $3,077.46, while Binance Coin (BNB) expanded by 0.7 per cent to $871.01. Bitcoin (BTC) saw a modest increase of 0.6 per cent, reaching $89,461.15. Stablecoins like US Dollar Tether (USDT) and US Dollar Coin (USDC) remained steady at $1.00 each.
How to understand the factors influencing the Naira’s performance? The interplay of official market dynamics, parallel market activities, central bank policies, and global economic trends all contribute to the exchange rate’s fluctuations. Understanding these elements provides a clearer picture of the currency’s trajectory.
The Naira’s performance in the initial sessions of 2026 offers a glimpse into potential economic shifts for Nigeria. The combination of currency appreciation, projected reserve growth, and anticipated inflation reduction paints a cautiously optimistic picture for the nation’s financial future.
