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The Naira has shown relative stability in 2026 after sharp volatility in 2024–early 2025.
It strengthened notably from peaks above the 2024 lows and is trading below the N1400/$ mark.
The official spot exchange rate is hovering around N1,370/$.
Major institutional consensus (including the Chartered Institute of Stockbrokers and CFG Advisory) projects for the Naira to trade within a relatively stable band of N1,350 to N1,520/$ for the rest of the year.
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The Nigerian currency will likely stay in the N1,350/$ – N1,500/$ band for most of 2026, although further appreciation is possible with sustained high reserves and FX reforms, while volatility remains due to external factors
Nigeria’s improved foreign exchange reserves, which have increased from about $45.5 billion in 2025 to about $51 billion, give the Central Bank of Nigeria (CBN) much more firepower to defend the currency against speculators.
The CBN has been hawkish, and its policy stance is very restrictive, with the MPR at 26.67%. While these high interest rates are limiting domestic credit growth for local companies, they have been able to attract foreign portfolio inflows (FPIs) looking for high-yielding fixed-income instruments
Inflation has decisively fallen below its old highs of above 30%, and most institutional analysts (PwC, United Capital, and LEAF) project inflation to average 15% to 23.8%.
However, household purchasing power remains sensitive, although base effects and stable FX pricing are cooling cost-push pressures. Nigeria’s GDP growth is showing a gradual return to 4.0%-4.4% as crude oil production has increased on average by about 1.48 million barrels per day (bpd)
The naira’s stability hinges more on the consistency of crude oil production volume as global oil prices now remain softer ($70/b for Brent). However, much of the past oil output was sold forward, limiting the near-term cash-flow gains of production increases. Nigeria could benefit from the faster flow of capital into frontier markets with strong structural reforms as interest rates begin to ease in advanced economies.
US Dollar Index advances in the global foreign exchange market
The US Dollar Index, which tracks the strength of the greenback against a basket of six major currencies, is advancing after being flat in the last session and hovering around 101.00 during Asian hours on Monday.
The currency was resilient despite easing global inflation pressures, which have been assisted by the resumption of normal oil shipping volumes through the Strait of Hormuz, and with financial markets pricing in a 77.3% chance of Federal Reserve (Fed) interest rate hikes by year-end, according to the CME FedWatch tool.
- Currency traders will also look to the US Institute for Supply Management’s (ISM) Services Purchasing Managers’ Index (PMI) later in the day, while turning attention to Wednesday’s release of the Fed’s June policy Meeting Minutes for clearer signs of the path of interest rates. Yet, the US Dollar may come under pressure.
- Last week’s labor market data caused markets to lower their bets on a September rate hike, which could pose problems for the US dollar. Nonfarm Payrolls (NFP) reported just 57,000 new jobs last month, significantly falling short of the 110,000 jobs predicted by the market.
- The sharp slowdown in hiring is a clear indication that the overall economy is slowing down, even though the headline unemployment rate did manage an unexpected decline to 4.2 percent from 4.3 percent in May.
Fed Chair Kevin Warsh reaffirmed last week the central bank’s independent commitment to its 2 percent price stability target. Interestingly, he also admitted that over the past month, inflation expectations and risks have finally started to decline.
