Naira Strengthens to ₦1,358/$ as FX Liquidity Improves
The naira extended its rally against the United States dollar on Wednesday, closing stronger at the official foreign exchange window as improved supply levels covered international payment demands.
The spot rate printed at ₦1,358 per dollar, marking its highest exchange rate position since the Central Bank’s FX reforms.
Market checks also confirmed appreciation in the informal currency segment, with the naira gaining 0.87 per cent to settle at ₦1,431 per dollar.
At the official window, the currency strengthened by 1.08 per cent to ₦1,358.28 per dollar, driven by substantial US dollar liquidity from foreign portfolio inflows, exporters, and non-bank corporates.
Analysts now project further appreciation in the first quarter of 2026, with expectations that the exchange rate could firm to between ₦1,300 and ₦1,350 per dollar.
The outlook is anchored on rising oil revenues, improved external reserves, and sustained conversion of US dollars to naira by foreign investors seeking opportunities in Nigeria’s financial markets.
Import-dependent companies are already benefiting from the successive rally, as fewer naira are required to settle foreign obligations. This has reduced cost pressures and improved balance sheet positions, particularly for firms in the manufacturing and consumer goods sectors.
The Central Bank’s update highlighted that the appreciation was largely driven by increased foreign portfolio investment inflows and stronger supply at the official window. Improved sentiment across both regulated and parallel markets signals growing confidence in the local currency, with investors positioning for further stability.
For investors, the naira’s rally offers dual benefits: lower import costs for corporates and stronger purchasing power for naira-denominated assets. If the currency sustains momentum towards the ₦1,300–₦1,350 band, it could unlock fresh opportunities in equities, fixed income, and real sector investments, while easing inflationary pressures tied to imported goods.
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