Market News

BY Hope Moses-Ashike 

The naira edged lower on Thursday in the official foreign-exchange market, retreating from a ten-day rally as renewed dollar demand weighed on the currency.

Data from the Central Bank of Nigeria (CBN) showed the naira weakened by N7.78 to close at N1,366.06 per dollar on the Nigerian Foreign Exchange Market, a 0.6 percent decline from N1,358.28 recorded in the previous trading session.

The currency also softened in the parallel market. The naira traded at N1,452 per dollar on Thursday, down from N1,450 per dollar the previous day, according to market operators.

The pullback comes even as Nigeria’s external buffers continue to strengthen. Gross external reserves rose to $46.80 billion as of February 4, 2026, from $46.70 billion a day earlier, CBN data show, underscoring improved capacity to meet foreign obligations and support market confidence.

Favourable external conditions have underpinned the accumulation of reserves. Stronger export earnings, reduced fuel imports and higher foreign-exchange inflows have sustained trade and current-account surpluses, aiding the gradual rebuilding of external buffers, according to the Nigerian Economic Summit Group. Foreign-exchange reserves are now at their highest level in several years, while the spread between official and parallel-market rates has narrowed, signalling improved market transparency and policy credibility.

Activity in the foreign-exchange market has also picked up sharply. FX sales rose to $4.74 billion in the first half of 2025, up from $3.18 billion in the second half of 2024, while FX purchases stood at $3.97 billion. This resulted in net FX sales of $0.77 billion, with no new forward transactions recorded during the period.

Total FX market turnover jumped to $52.47 billion, a 262.40 percent increase from $14.48 billion in the preceding half-year, reflecting stronger participation following the introduction of the Electronic Foreign Exchange Matching System, which has improved price discovery and transparency.

As part of efforts to reinforce market discipline, the Central Bank conducted foreign-exchange examinations of 34 authorised dealers, comprising 29 commercial banks and five merchant banks.

The review assessed compliance with existing FX regulations, as well as the sources and utilisation of foreign exchange for eligible transactions.