Analysts Predict Naira to Appreciate to N1,400/$ before December as Inflation Drops, Reserves Rise
- The Nigerian currency will rebound before the close of the year, according to new predictions by analysts
- They projected that the local currency will end 2025 between N1,400 and N1,450 per dollar, as Nigeria’s inflation keeps declining
- They also forecast that the country’s inflation rate may hit the 15% mark set by the Nigerian government in its 2025 budget
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
Analysts have predicted that the naira would end the year between N1,400 and N1,450 per dollar as Nigeria’s inflation falls.
CardinalStone Research disclosed in its macroeconomic update that it anticipates the fall in inflation to boost the Nigerian currency.
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Falling inflation to drive naira’s rally
A prior report by Legit.ng disclosed that the National Bureau of Statistics (NBS) revealed in its latest Consumer Price Index (CPI) that Nigeria’s inflation rate declined to 18.02% in September 2025, relative to 20.12% in August.
That is the sixth consecutive month inflation had fallen and the first time in three years it fell below the 20% ceiling.
The decline was supported by strong base effects as supply conditions improved amid the seasonal harvest.
Experts predict new inflation rate
Stressing the inflation effect, CardinalStone stated that the ongoing reduction in inflationary trends is good for the naira.
It revealed that combined with a sustained current account surplus and a steady rise in external reserves, the trend is expected to boost the naira’s value.
“We project FX to close the year within the range of N1,400.00/$-N1,450.00/$.
According to the company, the softer inflation reinforces the case for additional monetary easing by the Central Bank of Nigeria at its November meeting, stating that it expects 100bps reduction in the Monetary Policy Rate (MPR) to 26.0%.
Also, CardinalStone said that a combination of lower inflation and an anticipated rate cut may drive further yield reduction across the naira’s credit market.
“While the curve may remain inverted, we expect a sharper adjustment at the short end of the curve,” the firm said.
According to a Punch report, the firm disclosed that inflation will continue to fall and move closer to the 15% target set by the Nigerian government, stating that it expects to see scope for further moderation inflation.
FG may achieve its 2025 inflation target
Additionally, experts at United Capital projected that inflation may close the year slightly above the 15% target set by the Nigerian government in its 2025 budget.
“We project an average inflation rate of 16.07 per cent for Q4 2025, assuming no external shocks exert additional upward pressure on consumer prices.
“United Capital Research believes this outlook could encourage the Monetary Policy Committee of the Central Bank of Nigeria to consider another interest rate cut at its upcoming meeting scheduled for Monday, November 24, and Tuesday, November 25, 2025.”
In its projection, Coronation Asset Management said that while the September inflation prints extend the reduction streak, it shows a two-speed economy as food prices are quickly falling, while core inflation remains high.
The month-on-month decline in CPI shows entrenched service-sector cost pressures.
The naira wobbles in all markets
The apex bank’s MPC at the next meeting in November may continue with a controlled, data-driven easing path to preserve macro stability while still trying to nurture the developing recovery in the economy.
While the experts are hopeful about further fall in inflation and naira’s stability, an earlier report by Legit.ng disclosed that the Nigerian currency depreciated due to high dollar demand.
The development came amid CBN’s intervention in the forex market.
The local currency closed at N1,475.35 per dollar on Friday, October 17, 2025, down from N1,455.17 it closed the previous day.
In the parallel segment of the foreign exchange market, the naira dipped to N1,484 per dollar, according to Cowry Asset Management Limited.
Forex reserves climb
The move shows a lingering forex demand pressure and cautious market sentiment.
Despite the naira falling at the forex market, Nigeria’s external reserves hit $42.668 billion on Thursday, October 18, 2025, driven by steady crude sales, improved non-oil inflows, and a strong trade surplus, which have supported forex stability.
Source: Getty Images
CBN announces $8.6bn FX turnover
Legit.ng earlier reported that this may be the best of times for Nigeria’s economy as the Central Bank of Nigeria (CBN) has revealed that the country’s monthly FX turnover has risen to a new high.
According to CBN’s deputy governor, Mohammed Sani Abdullahi, Nigeria’s monthly FX turnover stands at $8.6 billion in 2025.
The CBN’s deputy governor stated this during an investors forum on the sidelines of the annual meetings of the International Monetary Fund (IMF)/World Bank in Washington, USA.
Source: Legit.ng
