Analysts at Cordros Securities project that the naira could close 2026 around N1,350, supported by positive fundamental developments expected throughout the year.
This insight comes from their 2026 outlook report, “Building Momentum Beyond the Rebound,” which provides reviews of macroeconomic trends and market dynamics.
According to the report, the naira is likely to trade within a N1,450–N1,350 range as distortions in the foreign exchange market gradually ease.
What the report says
The report notes that a favorable FX environment, higher external inflows, and sustained policy discipline are expected to strengthen investor confidence in the naira throughout full-year 2026.
This, they explained, should help the naira exchange rate move closer to its equilibrium value at N1,230.
On potential risks of depreciation, the analysts stated:
“If election-related money supply rises, oil prices fall below USD 58/barrel for a sustained period, and global pressures return, adverse trade dynamics could push the naira to NGN 1,550 by year-end.”
Analysts said the Naira’s 2025 appreciation highlights its undervaluation, with the IMF’s Real Effective Exchange Rate (REER) index estimating it about 23.6% below fair value, around N1,163/USD.
Highlighting their technique, Cordros now applies the Behavioural Equilibrium Exchange Rate (BEER) approach, which connects the exchange rate to productivity, trade terms, fiscal positions, and risk premia.
The BEER model shows that the naira is undervalued by 19.3% at N1,521.60/USD versus its N1,230 fair value, improving from 35.1% in 2024 due to better conditions.
Currently at N1,458.32 per dollar, the naira has appreciated over 5% year-to-date against the USD in 2025, marking the first positive year since 2019.
Market trend
The naira opened January 2025 at N1,537 per United States dollar and closed the month in the green, appreciating about 4% to N1,480.
However, bearish movements in February pushed the currency above N1,500 per dollar by March, nearly reaching N1,600 in April and settling at N1,596.
From May, a recovery began as the dollar weakened amid global trade tensions, and by June, the naira had strengthened to N1,530, marking a modest H1 gain of about 0.4%.
The second half of the year has been largely favorable, particularly in September, when the naira appreciated N1,476.62 per dollar. By October and November, it had gained further to N1,445.
Although the naira has experienced a slight depreciation of about 1% in mid-December, trading above N1,450, it has remained relatively firm within the N1,400 zone overall.
