Analysts Expect Naira to Strengthen This Week After US Midterm Elections

Currency traders expect the naira to strengthen this week, citing improved global risk sentiment after the US midterm elections. The naira was quoted at 1,348.74 to the dollar on the Nigerian Foreign Exchange Market (NFEM) last Thursday, compared with 1,349 a week earlier. In the parallel market, the currency was changing hands at N1,400 to the dollar.

A trader said: "I expect an appreciation on the naira considering what has happened in the US. Right now there is a bit of risk-on sentiment and that would be positive for our own market."

US Midterms Lift Risk Appetite

The midterm elections saw the Democratic Party winning back the Senate and House of Representatives from President Donald Trump’s Republican Party. Analysts believe the development may lead to increased predictability with regard to US government policies.

That shift in global risk sentiment is the main reason traders see room for naira appreciation this week. The NFEM quote of 1,348.74 to the dollar was slightly stronger than the 1,349 recorded a week earlier.

Reserves Grew, But at a Slower Pace

Nigeria’s gross external reserves increased by $295.35 million in October 2026. It was the weakest monthly growth recorded by the dollar buffers so far in 2026.

Data from the Central Bank of Nigeria (CBN) showed gross reserves rose from $54.93 billion at the end of September to $55.22 billion on October 30. The reserves opened October at $54.95 billion on October 2 and maintained a gradual upward movement, reaching $55.26 billion on October 27 before declining slightly to $55.22 billion at the end of the month.

The reserves have been heading south since the beginning of November. They fell from $55.17 billion on November 2, 2026 to $55.13 billion on November 5.

What It Means for the Naira

The expectation of naira appreciation rests on improved risk appetite tied to the US election outcome. Traders are watching whether that sentiment holds and whether it supports the local currency in both the NFEM and parallel market.

For consumers and businesses, a stronger naira would ease the cost of imported goods and dollar-denominated obligations. The reserve figures also remain a key buffer to watch, especially after the slower October growth and the November decline.