Naira Reaches New High Of N1,401.22/$ Following EFEMS Rollout

The naira strengthened significantly on Tuesday, closing at a record N1,401.22 per dollar at the official foreign exchange market, its strongest performance since the launch of the Electronic Foreign Exchange Matching System.

Figures from the Central Bank of Nigeria showed that the currency gained 1.26 percent on the day, with the dollar quoted at N1,401.22. This represented an appreciation of N17.73 from the N1,418.95 recorded on Monday at the Nigerian Foreign Exchange Market.

The data also indicated strong demand dynamics, as foreign exchange market participants submitted bids as high as N1,400 per dollar.

The gain at the official window occurred alongside relative calm in the parallel market, commonly referred to as the black market, where the naira closed unchanged at N1,485 per dollar.

Nigeria’s external reserves have continued to rise steadily, offering further backing for the local currency. Data published on the CBN’s website showed that external reserves increased to $46.03 billion as of January 26, 2026, reflecting sustained inflows and growing confidence in the foreign exchange market.

Market analysts generally expect the naira to maintain relative stability in the medium term. Several forecasts indicate that the currency is likely to trade between N1,400 and N1,500 per dollar this year, supported by stronger FX liquidity and ongoing macroeconomic reforms.

Tilewa Adebajo, chief executive officer of CFG Advisory, said the naira is expected to remain within the N1,400 to N1,500 per dollar range, pointing to improving economic fundamentals. He noted that reforms in the oil sector, increased foreign capital inflows, and stronger diaspora remittances are helping to reinforce exchange rate stability and boost confidence in the FX market.

In a similar projection, the Nigerian Economic Summit Group said the naira is likely to trade around N1,480 to the dollar in 2026. The group also forecast that Nigeria’s external reserves could climb to about $52 billion over the same period, driven by the consolidation of recent macroeconomic reforms and sustained stabilisation efforts.

The Central Bank of Nigeria’s outlook broadly aligns with these expectations. The apex bank projects an average exchange rate of N1,451.63 per dollar at the Nigerian Foreign Exchange Market in the fourth quarter of 2025, with further moderation to around N1,400 per dollar in 2026.

This outlook is based on anticipated improvements in FX market efficiency, stronger capital inflows, a current account surplus, and a broad-based economic recovery.

The recent appreciation of the naira has occurred alongside structural changes in the foreign exchange market. On October 3, 2024, the CBN announced the introduction of the Electronic Foreign Exchange Matching System, aimed at reducing speculative activities while improving transparency and price discovery in the FX market.

The EFEMS platform, which is operated by authorised dealers in the Nigerian Foreign Exchange Market, became fully operational on December 2, 2024, after a two-week pilot phase conducted in November.

Since its implementation, market participants have cited improved confidence, better price alignment, and enhanced transparency as key factors supporting recent gains in the naira.