Naira Declines Sharply Amid Foreign Exchange Crisis

In February 2026, the Nigerian naira experienced a significant decline against major international currencies, including the US dollar, euro, and British pound, amidst a tightening grip of the black market foreign exchange segment. On February 1, the naira was recorded at 1,485 naira to 1 dollar, 1,690 naira to 1 euro, and 1,980 naira to 1 pound in the parallel market, indicating a growing gap between demand and supply of foreign currency.

Traders cited a persistent scarcity of foreign exchange and rising demand for imports and travel as contributing factors to the naira's instability. The challenges stem from long-standing structural issues rather than sudden market shocks, with factors such as interest rate policies and inconsistent government policies discouraging foreign investment.

The Central Bank of Nigeria's frequent changes in foreign exchange regulations have left businesses uncertain, worsening reliance on the black market. The economic strain has led to higher prices for essential goods and services, further diminishing the purchasing power of ordinary Nigerians.