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The Naira on yesterday appreciated to N1,393 per dollar in the parallel market from N1,403 per dollar on Tuesday.
Similarly, the naira appreciated to N1,341.99 per dollar in the Nigerian Foreign Exchange Market, NFEM.
Data from the Central Bank of Nigeria, CBN, showed that the indicative exchange rate for the naira fell to N1,341.99 per dollar from N1,348 per dollar on Tuesday, reflecting N6.01 appreciation for the naira.
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Consequently, the margin between the parallel and official markets narrowed to N51.01 per dollar from N55 per dollar on Tuesday.
Nigeria’s naira strengthened to its best level against the US dollar in two years on Friday, touching N1,344.74 to the dollar at the official Nigerian Foreign Exchange Market window as a sustained oil price rally above the government’s budget benchmark, surging external reserves, and structural reforms introduced by the Central Bank of Nigeria converged to produce what analysts described as the most stable macroeconomic moment the country has experienced since before its 2023 currency crisis.
The naira opened at N1,344.74 per dollar on Friday morning, reaching a high of N1,345.58 before settling near N1,345.40 by midday, a continuation of the appreciation that saw it close at N1,346 on Thursday, its strongest sustained performance in the official window in over two years. The improvement has been sharp and consistent. In late January, the currency was trading above N1,420 to the dollar. On February 12, it touched a two-year high near N1,348.95, and has held close to that range since.
The parallel market has followed suit. By mid-February, the street rate had settled between N1,425 and N1,440, a dramatic compression from the crisis levels of 2024, when the spread between the official and black market rates exceeded 60 per cent at its worst. By December 2025, that premium had narrowed to just over two per cent.
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Nigeria’s gross foreign reserves rose to $48.37 billion as of February 16, a $2.47 billion increase in a single month, and the highest level the country’s reserve position has reached since 2018. The trajectory of the recovery illustrates the scale of the reversal. Reserves had fallen to $37.21 billion in June 2025 before a sustained climb through the second half of the year, rising through $39 billion in July, $41 billion in August, $42 billion in September, $43 billion in October, and $44 billion in November. By December 31 they had reached $45.50 billion, and by February 16 they had surged further. At the current level, reserves now provide more than 14 months of import cover, a dramatic improvement from the eight months of coverage recorded in mid-2025, when the naira was weakening past N1,600 to the dollar.
Oil prices have provided a significant tailwind. Brent crude traded at approximately $69 per barrel this week, comfortably above Nigeria’s 2026 federal budget benchmark of $64.85 per barrel, a threshold whose breach translates directly into higher fiscal receipts, stronger export earnings, and expanded dollar inflows through the NNPCL and the federation account. For an economy where oil accounts for more than 80 per cent of foreign exchange earnings and roughly half of government revenues, every dollar increase above the benchmark compounds the revenue effect across multiple channels simultaneously.
The rally has been driven by geopolitical risk premium stemming from escalating US–Iran tensions, compounded by temporary supply disruptions, unplanned production outages in Kazakhstan and weather-related disruptions to US output from Winter Storm Fern. Analysts have raised the possibility of more dramatic price spikes if the confrontation deteriorates. A disruption to the Strait of Hormuz, the chokepoint through which approximately 20 per cent of global oil supply passes, could, according to modelled scenarios circulating among energy traders, push Brent to $91 or as high as $150 per barrel within weeks. For Nigeria, that would represent an extraordinary windfall. For global energy markets, it would be destabilising.
Multiple structural reforms have amplified the effect of the commodity price tailwind. CBN Governor Olayemi Cardoso said at a recent industry event that the current account surplus strengthened by over 85 per cent in 2025, and that the reserve build-up was being achieved organically, through improved market functioning, stronger non-oil exports, and robust capital inflows, rather than through borrowing. Monthly diaspora remittances have surged by 200 per cent, rising from approximately $200 million to $600 million per month, according to Cardoso. The CBN’s decision to authorise weekly dollar sales of up to $150,000 to each licensed Bureau De Change operator has deepened liquidity in the retail segment of the market and contributed to narrowing the official-parallel rate spread.
