The Naira began the first full trading week of 2026 amid continued fluctuations across Nigeria’s foreign exchange market segments, reflecting a cautious start to the year.
As of the morning of January 5, 2026, the local currency showed a modest recovery compared to its closing position at the end of 2025, although it remains under sustained pressure due to persistent demand for the United States Dollar.
At the Nigerian Foreign Exchange Market, NFEM, which serves as the official trading window monitored by the Central Bank of Nigeria, the Naira is exchanging at an average rate of 1,441.85 to the US Dollar.
Trading activity in the official window was marked by early volatility, with the exchange rate weakening to as low as 1,437.10 in the morning session before regaining stability around the current level. Market analysts attribute price movements largely to liquidity levels within the NFEM, noting that ongoing government efforts to unify exchange rates continue to shape price discovery.
In the parallel market, commonly referred to as the “black market,” the Naira continues to trade at a higher premium compared to the official window. Independent Bureau De Change operators and street traders across major commercial centres including Lagos, Abuja and Kano are currently quoting the Dollar at rates ranging between 1,455 and 1,465, depending on transaction size and location.
Recent weeks have, however, seen a slight narrowing of the gap between the official and parallel market rates. Analysts say this trend reflects gradual convergence supported by tighter monetary policies aimed at reducing speculative activities and improving market stability.
The prevailing exchange rate dynamics are being driven largely by the resumption of full-scale business activities following the festive period. Increased Dollar demand from manufacturers and importers seeking to replenish inventories for the first quarter of 2026 has intensified pressure on the local currency. At the same time, investors remain watchful of the Central Bank of Nigeria’s foreign reserve position and any possible market interventions intended to boost liquidity.
