The Nigerian naira held firm against the US dollar in early trading on Wednesday, 25 February 2026. Figures from the Nigerian Foreign Exchange Market (NFEM), alongside informal market sources, suggest the currency is experiencing reduced volatility, aided by sustained policy interventions from the Central Bank of Nigeria (CBN).
Official Market Performance (NFEM)
At the official window, the naira opened at 1,351.13 per dollar. During the morning session, it recorded slight movements, briefly reaching 1,352.02 before easing to 1,350.88 as of 7:30am WAT. This points to a steady pattern compared with the closing levels seen at the beginning of the week.
The relative calm within the NFEM is largely credited to the central bank’s continued emphasis on a transparent price discovery framework. Authorised dealers report adequate liquidity, helping to avert the sharp and erratic fluctuations that previously unsettled the market. The weekly average rate remains close to the 1,348 level, signalling a tight trading band.
Parallel Market Movements
In the parallel market, the dollar traded within the 1,355 to 1,365 range. The narrow margin between the official and “black market” rates — currently below 1.5 per cent — reflects the effectiveness of recent exchange rate harmonisation measures.
Currency traders in major commercial centres such as Lagos and Kano report steady demand for smaller retail transactions. However, the absence of large-scale speculative activity has prevented the informal rate from diverging significantly from the official benchmark.
Key Economic Drivers
A number of factors are shaping the dollar-naira dynamics this Wednesday:
Interest Rate Environment: The Monetary Policy Rate (MPR) stands at 26.50 per cent, maintaining a high-yield climate that continues to draw foreign portfolio inflows and promote domestic savings in the local currency.
Inflation Outlook: With January 2026 inflation at 15.10 per cent, the market is factoring in a “real rate” that is increasingly appealing to investors, offering underlying support for the naira.
Foreign Reserves: External reserves, estimated at over 47 billion dollars, have provided the CBN with sufficient room to intervene where necessary and address temporary liquidity pressures.
Market Outlook
As the week progresses, analysts anticipate that the naira will trade within the 1,345 to 1,355 range in the official window, barring unexpected movements in global oil prices or significant policy shifts from the US Federal Reserve.