Experts Predict New Exchange Rate for Naira in 2026 as FG Announces Expectations
- Analysts are projecting a stable naira in 2026, expecting the Central Bank of Nigeria (CBN) to prioritise stability over appreciation
- They say the apex bank should be more concerned with reducing volatility and strengthening confidence in the forex market
- SBM Intelligence said that the naira will trade within a narrow window against the dollar in the coming year
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Economic analysts expect Nigeria’s monetary authorities to prioritise exchange rate stability in 2026 rather than push for aggressive appreciation of the naira, as the Federal Government outlines new foreign exchange expectations.
The consensus among experts is that policymakers are more concerned with consolidating recent gains, reducing volatility, and strengthening confidence in the FX market.
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SBM Intelligence projects that the naira will trade within a relatively narrow band of N1,470 to N1,520 per dollar throughout 2026.
Recent FX reforms support confidence
According to the Africa-focused research firm, this outlook is supported by expectations of stronger government revenues and sustained crude oil production, both of which are critical to foreign exchange inflows and reserve accumulation.
The naira has shown relative calm across both the official and parallel markets following the introduction of the Electronic Foreign Exchange Matching System in December 2024.
The platform was designed to improve transparency and price discovery, helping to rebuild trust in the FX market after years of distortions.
At the official Nigerian Foreign Exchange Market, the naira recently appreciated to N1,456.56 per dollar, reflecting modest gains over the previous trading session.
In the parallel market, the currency remained largely stable around the N1,480 to N1,482 range, underscoring the narrowing gap between both segments.
External Reserves and medium-term outlook
Nigeria’s external reserves dipped slightly to $45.21 billion as of December 19, 2025, according to Central Bank of Nigeria data.
Analysts note that the decline is modest and does not significantly alter the medium-term outlook, especially given expectations of improved foreign exchange inflows from oil exports and portfolio investments.
According to a BusinessDay report, SBM Intelligence noted that its projection aligns closely with the Federal Government’s Medium-Term Expenditure Framework assumption of N1,512 to the dollar.
The firm stressed that stability, rather than a stronger Naira, is the most realistic and beneficial outcome for the economy in the near term.
Why stability matters more than strength
Analysts explain that exchange rate stability allows businesses and investors to plan with greater certainty, even if the currency does not appreciate significantly.
A sharply stronger naira could hurt export competitiveness, while excessive depreciation would worsen inflationary pressures.
Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co., said the CBN’s approach reflects a focus on underlying fundamentals rather than targeting a specific exchange rate level.
He argued that policy consistency and market confidence are more important than short-term currency gains.
Diverging views on modest upside
While stability remains the dominant expectation, some analysts see room for mild appreciation.
Bismarck Rewane, chief executive officer of Financial Derivatives Company, believes improved reserves, stronger FX supply, and reduced market pressure could support a gradual firming of the naira to around N1,450 to N1,500 per dollar.
Afrinvest West Africa also highlighted structural improvements following recent reforms.
The firm noted that the gap between official and parallel rates has narrowed to less than N20, down from over N100 a year earlier, reflecting better liquidity and reduced distortions.
Source: Twitter
Overall, analysts agree that in 2026, the CBN’s main goal will be to preserve stability, limit volatility, and sustain investor confidence as broader macroeconomic reforms continue to take effect.
Meanwhile, a prior report by Legit.ng disclosed that the federal government has approved a budget exchange rate of N1,512 to $1 for 2026 as part of its 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
In 2025, the federal government set the exchange rate at N1,400 to a dollar.
The MTEF/FSP, a statutory three-year fiscal guide, sets assumptions that will underpin the 2026 Appropriation Bill, including oil/output benchmarks, revenue projections, deficit limits, and spending priorities.
CBN Sells $150 million to authorised dealers
Legit.ng previously reported that CBN injected an extra $150 million into the foreign exchange market at the beginning of the week to protect the local currency from further declines.
Analysts have said that the naira would stabilise in the second quarter of this year but warned that with raging global tariff wars and falling crude prices, the local currency may still come under pressure.
Last week, the apex bank sold about $635 million to authorised dealers in the forex market as it intensified efforts to boost liquidity levels in the market.
Source: Legit.ng
