Nigeria’s currency is expected to remain relatively stable in the coming months despite sustained global strength in the U.S. dollar, supported by rising external reserves, improved foreign exchange reforms and continued investor interest in naira-denominated assets.
Market analysts say the naira has continued to trade within a relatively narrow band of between N1,370 and N1,385 per dollar at the official Nigerian Foreign Exchange Market (NFEM), reflecting improved stability in the country’s foreign exchange market.
The improved outlook is underpinned by Nigeria’s external reserves, which have climbed above the $51 billion mark, aided by stronger crude oil export receipts, foreign portfolio investments and debt inflows. The healthy reserve position is expected to provide the Central Bank of Nigeria (CBN) with sufficient firepower to cushion the local currency against excessive volatility.
Analysts also attribute the positive sentiment to Nigeria’s high-yield environment. Treasury bill rates ranging between 16 and 19 per cent, alongside the CBN’s benchmark monetary policy rate of 26.5 per cent, have continued to attract foreign investors seeking higher returns through carry trade opportunities.
In addition, recent reforms aimed at improving transparency in the foreign exchange market and tightening regulations governing Bureau de Change operators have reduced arbitrage opportunities while strengthening confidence in the official market. These measures, coupled with the clearing of most outstanding foreign exchange obligations, have further enhanced Nigeria’s attractiveness to international investors.
Despite the favourable outlook, analysts caution that seasonal corporate demand for foreign exchange ahead of the year-end shopping period could temporarily weaken the naira, potentially pushing the exchange rate above N1,400 to the dollar. However, they expect any such pressure to be short-lived.
Overall, the base-case projection is that the naira will likely trade within the N1,320 to N1,420 per dollar range through the second half of the year, supported by the CBN’s sizeable foreign exchange reserves and its capacity to contain speculative pressure in the market.

