The naira extended its recent rally in the official foreign exchange market, closing at N1,355 to the United States dollar and consolidating a week-long recovery that has lifted confidence among investors and importers.

Central Bank of Nigeria data show the local currency has been on a steady appreciation streak. After trading at N1,390.5 per dollar on Tuesday, the naira firmed to N1,373.5 on Wednesday, N1,370 on Thursday and N1,363.5 on Friday, before strengthening further to N1,355. Monday’s session saw the currency fluctuate within a narrow band between N1,365.35 and N1,354, underscoring relatively stable intraday conditions in a market that has recently been marked by sharp volatility.

Analysts attribute the gains to a combination of tighter monetary policy, improved dollar liquidity and a more transparent foreign exchange framework introduced by the CBN. Market participants say the central bank’s efforts to clear parts of the FX backlog and curb speculative demand have helped ease pressure on the naira, while higher oil receipts have boosted supply.

The CBN has highlighted Nigeria’s strengthening external buffers as a key pillar of the currency’s resilience. Net foreign exchange reserves climbed to $34.80 billion at the end of 2025, while gross external reserves rose to $50.45 billion by February 2026, supported by firmer oil prices, increased crude output and renewed portfolio inflows. In its 2026 macroeconomic outlook, the bank projects reserves could reach about $51.04 billion if oil revenues remain robust and reforms stay on track.

Governor Olayemi Cardoso has repeatedly argued that ongoing monetary and FX reforms are designed to restore credibility, attract long-term capital and deepen market liquidity. The authorities have signalled that they will continue to prioritise price stability and a market-reflective exchange rate, while intervening to smooth excessive volatility.

Global currency moves also framed trading sentiment. The euro slipped around 0.12 per cent to $1.1492 and the British pound eased 0.1 per cent to $1.33, even as the dollar index hovered near 99.9. The Australian dollar weakened ahead of a key policy decision by its central bank, reflecting broader caution as investors weighed geopolitical tensions involving Iran and their implications for global energy markets.

Traders in Lagos say sustained improvement in reserves and policy consistency will be crucial to determining whether the naira’s latest rebound can be maintained in the coming weeks.