CBN Shares Expectation for Naira in 2026 As Dollar Continue To Rise
- The CBN has provided insight into what to expect from the naira amid plans to ease interest rate in 2026
- There is also borrowing rates forecast with the index declining from 15.4 to 11.7 points, as inflation continues to slow
- Insecurity, high and multiple taxes, and inadequate power supply remain the biggest constraints for businesses
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Nigerian currency the naira is expected to remain largely stable over the next six months while borrowing costs are projected to decline, according to the Central Bank of Nigeria’s (CBN) latest Business Expectations Survey (BES).
The monthly report obtained from CBN website captured the feelings of about 1,900 businesses nationwide.
Source: Twitter
In the report, it was revealed that respondents expect the naira to strengthen from an index of 28.8 points to 42.2 points over the six months to May 2026.
This positive out will further extend a period of relative calm that began in the last few months after years of volatility.
Part of CBN report reads:
“Respondents expect the naira to US dollar exchange rate to steadily appreciate across the review periods, as indicated by the positive indices,”
“They also anticipate a continuous positive outlook for the borrowing rate during the same periods.”
Positive outlook for naira
The naira has enjoyed an unusually long stretch of stability in recent months, after losing about 41% of its value in 2024 following the unification of the exchange rate and the move to a more market-determined currency regime.
While the currency has come under mild pressure recently due to increased foreign exchange demand from local companies meeting import needs during the festive season, analysts say stability is likely to persist.
They cite the CBN’s measured interventions to curb excess volatility and sustained inflows from foreign portfolio investors as key supports.
Also, borrowing rates are also forecast to ease, with the index falling from 15.4 points to 11.7 points over the same period, as inflation Nigeria’s key driver of monetary tightening continues its downward trend.
To rein in inflation, the central bank has kept its benchmark interest rate largely unchanged since last year, cutting it only marginally by 50 basis points at its penultimate policy meeting of 2025.
This left the monetary policy rate at 27%, even as the CBN adjusted its asymmetric corridors to encourage credit expansion, BusinessDay reports.
Source: Getty Images
With inflation projected to fall into single digits next year from 14.45% in November, policymakers may have greater scope to ease rates further and boost credit to businesses that have been constrained by high financing costs.
Insecurity, taxes weigh on businesses
Despite the improved outlook, businesses continue to face significant challenges.
The BES identified insecurity, high and multiple taxes, and inadequate power supply as the most severe constraints.
“Respondents identified Insecurity (70.1), High/Multiple Taxes (69.7), Insufficient Power Supply (69.3), High Interest Rate (67.2), and Financial Problems (64.7) as the top five business constraints in November 2025,” the report said.
Poor infrastructure and an unfavourable political climate ranked at the bottom of the top ten constraints, suggesting that firms were more concerned about financial and operational pressures than political risks during the review period.
Dollar rises again
Earlier, Legit.ng reported the United States dollar has weakened against the naira across official and parallel foreign exchange markets.
The most recent data from the CBN showed that the naira closed AT N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier,
Friday's exchange rate not only extended the naira’s strong rally but also marked the highest level the currency has reached in 2025.
Source: Legit.ng
