Market News

THE naira appreciated against the United States dollar on Tuesday, February 3, closing at N1,372.91/$ at the official foreign exchange market, according to data from the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This represents an improvement from N1,390.36/$, the rate at which the local currency closed on Monday, underscoring a modest but notable gain as trading commenced for the new month.

At the parallel market, the naira remained stable at N1,450/$, marking two consecutive days of unchanged performance, a development that traders say reflects improving alignment across foreign exchange segments.

Market analysts note that the naira’s latest performance signals a gradual strengthening from its position at the end of January and points to relatively stronger buffers compared with the same period last year. The movement also highlights a narrowing gap between the official and parallel markets, a key indicator closely watched by policymakers and investors as a measure of confidence and market efficiency.

“The early-February performance suggests improved coordination in the FX market and reduced speculative pressure,” a Lagos-based currency dealer said. “Stability in the parallel market, combined with gains at the official window, is encouraging.”

Data from NAFEM further showed that the naira posted mixed but largely stable performances against other major currencies. It closed at N1,995 to the British pound, N1,700 to the euro, N1,045 to the Canadian dollar, and N200 to the Chinese yuan.

Compared with recent trading sessions and the same period in 2025, the official foreign exchange market opened February 2026 with a firmer naira position, reflecting ongoing efforts to improve liquidity, transparency, and price discovery in the FX market.

Economists say sustained stability will depend on consistent foreign exchange inflows, disciplined demand management, and continued policy alignment by monetary authorities. While the recent appreciation remains modest, it is viewed as a positive signal at a time when market participants are assessing the outlook for the naira in the first quarter of the year.

For now, the local currency’s steady start to February has offered cautious optimism, reinforcing expectations of gradual convergence across exchange rate windows and improved confidence in the foreign exchange market.