The Naira is expected to trade near ₦1,350/$ by 2026 as economic indicators strengthen, analysts at Cordros Securities have projected.
They gave the forecast in a new report titled ‘Nigeria in 2026: Building Momentum Beyond the Rebound’.
The report provides reviews of macroeconomic trends and market dynamics.
It states that the naira is likely to trade within a N1,450–N1,350 range as distortions in the foreign exchange market gradually ease.
“In our base case scenario, we estimate the naira to trade within the NGN1,350.00/USD – NGN1,450.00/USD band, with the naira likely closing at NGN1,350.00/USD by year-end,” the analysts forecast.
READ ALSO: Fuel Price War: Nigerians Demand NNPC Slash Prices to Match Dangote’s ₦739 Rate
They highlighted that a favourable foreign exchange environment, higher external inflows, and sustained policy discipline will help strengthen investors’ confidence in the naira throughout the review year.
They stressed, however, that the naira could likely trade towards the N1,550/$ level by year-end if certain macroeconomic conditions were to materialise.
“If money supply from election spending increases, oil prices fall significantly below USD58.00/barrel for a sustained amount of time and global pressures resurface, adverse terms-of-trade dynamics and heightened risk premia could widen the equilibrium misalignment, exerting renewed depreciation pressure on the naira, likely towards the NGN1,550.00 level by year-end,” the analyst said.
READ ALSO: BudgIT Raises Red Flags Over FG Revenue Figures Ahead of 2026 Budget
According to analysts, the Naira’s appreciation this year highlights its undervaluation, citing that the IMF’s Real Effective Exchange Rate (REER) index estimates it to be about 23.6 per cent below fair value, around N1,163/$.
The analysts said they applied the Behavioural Equilibrium Exchange Rate (BEER) approach in their projection.
The BEER model is a technique used to connect the exchange rate to productivity, trade terms, fiscal positions, and risk premia.
It shows that the naira is undervalued by 19.3 per cent at N1,521.60/$ versus its N1,230 fair value, improving from 35.1 per cent in 2024 due to better conditions.
It added that currently at N1,458.32 per dollar, the naira has appreciated over five per cent year-to-date against the dollar, marking the first positive year since 2019.
Pinnacle Daily reports that the Naira opened January 2025 at N1,537/$ and closed at N1,457.84/$ on Friday, December 19
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
