The naira is projected to trade below N1,400 to the US dollar through the end of 2026, with market expectations putting the official exchange rate within the N1,290–N1,400/$ range.
The outlook is supported by Nigeria’s rising foreign exchange reserves, stronger diaspora remittances, stable crude oil output and continued intervention by the Central Bank of Nigeria (CBN) in the official foreign exchange market. Nairametrics
The official Nigerian Foreign Exchange Market (NFEM) rate has remained around N1,350/$ in recent sessions, while Nigeria’s foreign reserves have risen above $55 billion, providing additional liquidity support.
The Monetary Policy Rate (MPR), currently at 23%, is also expected to support the naira by maintaining relatively high yields and attracting foreign portfolio inflows.
However, seasonal demand for foreign exchange could put pressure on the currency as the December festive period approaches. Demand is typically driven by imports, international travel, school fees and other overseas payments.
The parallel market is already trading at a premium of about N1,390/$, indicating some pressure outside the official market. Analysts warn that the gap could widen towards year-end if foreign exchange liquidity comes under pressure. Nairametrics
At the same time, increased dollar inflows from Nigerians in the diaspora are expected to provide a counterbalance, particularly through remittances and increased inflows from Nigerians returning home for the holidays.
The CBN is also expected to remain active in the official market to moderate volatility and contain the spread between the official and parallel exchange rates.
Recent trading data showed the naira closing at about N1,349/$ in the official market on November 9, although seasonal demand has begun to exert some pressure on the currency. businesspost.ng
The outlook therefore points to a relatively stable naira through the festive season, although increased demand for dollars could test the currency’s recent gains in December.
