The naira closed January at ₦1,386 to the US dollar at the official foreign exchange market, reflecting continued efforts by monetary authorities to stabilize the local currency amid lingering pressure from demand for foreign exchange.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed that the naira’s January closing rate represented a marginal improvement from levels seen earlier in the month, when the currency traded closer to the ₦1,400/$ mark following renewed volatility.
Market analysts attribute the relative stability to a combination of Central Bank of Nigeria (CBN) interventions, improved dollar inflows from exporters, and tighter oversight of market participants. The CBN has in recent months intensified reforms aimed at restoring confidence in the FX market, including clearing parts of the FX backlog and enforcing stricter transparency rules.
Throughout January, the naira experienced moderate fluctuations, driven largely by seasonal demand for dollars, external debt servicing obligations, and import-related pressures. However, the currency avoided sharp swings, a development traders described as a sign of cautious market optimism.
“The January close suggests the naira is finding a temporary equilibrium,” said a Lagos-based currency analyst. “But sustainability will depend on consistent dollar supply and policy discipline.”
At the parallel market, the naira continued to trade weaker than the official rate, highlighting the persistent gap between formal and informal FX segments despite ongoing unification efforts.
The CBN has repeatedly stated that it remains committed to market-driven pricing, while working to boost FX supply through oil revenue optimization, non-oil exports, and foreign portfolio inflows.
Economists caution that while January’s close is encouraging, the naira remains vulnerable to external shocks, including oil price volatility and global monetary tightening.
“As we move into February, the key question is whether inflows will be strong enough to meet demand without aggressive intervention,” an economist said.
For businesses and investors, the January close at ₦1,386/$ offers a degree of predictability, though many continue to hedge against currency risk amid Nigeria’s broader economic adjustments.
The naira’s performance in the coming months is expected to serve as a critical indicator of the effectiveness of ongoing FX reforms and the country’s overall macroeconomic stability.
