BREAKING: Dollar Rises Again as Naira Slips to New Rate

In the official foreign exchange market during the second week of January 2026, the naira experienced a mild depreciation, closing at N1,421 per dollar on Wednesday. This information is derived from data released by the Central Bank of Nigeria (CBN) on the same day.

This fluctuation coincides with analysts’ observations of stronger reserve buffers, ongoing foreign exchange (FX) reforms, and anticipated structural improvements that are expected to provide support for exchange rate stability as the year progresses.

On Tuesday, the naira was valued at N1,416 per dollar and on Monday at N1,428 per dollar, with Wednesday’s close marking the first significant dip in mid-week rates for the new year.

According to official market data, the naira’s movement this week indicates a relatively stable performance within a narrow range, suggesting reduced volatility compared to previous years.

Earlier, reports indicated that the naira had weakened to N1,431 per dollar on January 2, 2026—the first trading day of the year—due to post-holiday FX demand and ongoing supply adjustments.

In the parallel market, the naira traded even lower, averaging between N1,490 and N1,495 per dollar on Wednesday, up from an average of N1,470 per dollar the day before.

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.

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.

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.