Naira Ends February 2026 Stronger at N1,368.5/$ Amid Rising Reserves and Policy Adjustments

Naira Records Month-on-Month Gain in February 2026

The Nigerian naira closed February 2026 on a stronger note, trading at N1,368.5 per dollar in the official market, marking an appreciation from the month’s opening rate of N1,384.5 per dollar. This modest gain reflects a gradual improvement in the currency’s performance despite late-month pressures.

Data from the Central Bank of Nigeria (CBN) indicates that the naira maintained a firmer position relative to January 2026, even as it faced volatility in the final week of the month.

Weekly Volatility in Late February

The currency opened the final week of February at N1,353.5 per dollar on Monday and depreciated steadily through subsequent trading sessions. By Friday, it settled at N1,368.5 per dollar, showing consistent weakening over that period.

Despite this short-term pressure, the overall month-on-month trend was positive. In January 2026, the naira opened at N1,431 per dollar and closed at N1,391 per dollar. February’s performance thus represented a continuation of stabilization efforts.

Robust Growth in External Reserves

A key factor supporting the naira’s relative strength was the significant buildup in Nigeria’s gross external reserves. Reserves rose to approximately $50 billion by the end of February, up from $46.59 billion at the start of the month.

CBN Governor Olayemi Cardoso confirmed that reserves reached $50.45 billion as of February 16, 2026, the highest level recorded in 13 years. Earlier in the year, reserves had crossed the $46 billion mark in January for the first time in about eight years and surpassed $47 billion by February 11, also a milestone not seen in roughly eight years.

This rebuilding phase began in late December 2025, when reserves increased from approximately $44.8 billion to $45 billion, then a six-year high. Within the first 22 days of January alone, reserves grew by about $509 million, underscoring sustained inflows and improved foreign exchange liquidity.

Nairametrics reports that Nigeria’s exchange reserves climbed to $48.5 billion, their highest since mid-May 2013. These developments provide a crucial buffer against exchange rate pressures.

Monetary Policy Adjustments Provide Stability

The CBN’s 304th Monetary Policy Committee (MPC) meeting in February influenced market sentiment through targeted adjustments. The Monetary Policy Rate (MPR) was reduced by 50 basis points to 26.5 percent from 27 percent.

Other key ratios remained unchanged: the Cash Reserve Ratio stayed at 45.0 percent for commercial banks and 16.0 percent for merchant banks; the Liquidity Ratio was held at 30.0 percent; and the Standing Facilities Corridor remained at +50/-450 basis points around the MPR.

These measures, alongside stronger reserves, helped cushion the naira against prolonged volatility.

Declining Inflation Supports Economic Outlook

Headline inflation declined for the eleventh consecutive month, reaching 15.1 percent in January 2026. This year-on-year improvement is notable, with the rate falling by 12.51 percentage points from 27.61 percent in January 2025.

The moderation in price growth across the country aligns with broader efforts to stabilize the economy, indirectly bolstering confidence in the naira.

Implications for Nigeria’s Economy

The naira’s February performance, driven by reserve accumulation and policy fine-tuning, signals potential for sustained improvement in foreign exchange dynamics. Higher reserves enhance the CBN’s capacity to intervene in the market, while easing monetary policy aims to support growth without overheating inflation.

For businesses and households reliant on dollar-denominated imports, the modest appreciation offers some relief from cost pressures. Investors may view these trends as positive indicators of macroeconomic resilience.

However, the late-month depreciation highlights ongoing challenges, including demand pressures and global factors. Continued reserve growth and disciplined policy implementation will be critical to maintaining this trajectory.

The data underscores a period of relative stability following months of turbulence, with the CBN’s actions playing a pivotal role in fostering market confidence.

Source: https://nairametrics.com/2026/03/02/naira-closes-february-stronger-month-on-month-at-n1368-5/