Naira Approaches 2026 Estimated Fair Value as Rally Extends
The naira extends its year-to-date rally, supported by sufficient foreign-currency liquidity in the official window, according to trading data from the Central Bank of Nigeria (CBN).
The naira exchange rate against the US dollar continues to gain momentum, with a 5.44% year-to-date gain, driven by CBN FX intervention and broader confidence in the official window.
High external reserves, elevated oil prices in global commodity markets, and rising crude oil production are supportive of the country’s official exchange rate on the supply side.
Meanwhile, the CBN has maintained its stance of intervening in the forex market when necessary to drive liquidity after settling liabilities.
The supply boost from the authority, in addition to foreign portfolio investment dollars, importers/exporters and non-bank corporate inflows, continues to keep the market liquid.
The spot rate at the Nigerian Foreign Exchange Market (NFEM) closed at N1357 per US dollar last week, strengthening from N1365 at the start of the trading session, the CBN revealed in its FX data update.
Spot rates fluctuated across trading sessions in adjustment to the size and direction of foreign currency liquidity at the official window, FX data showed.
The market balanced financial institutions’ activities against foreign currency demand and supply and kept the official rates range-bound during last week.
NFEM interbank FX turnover fluctuated between a week low of $29.060 million and a high of $213.845 million, with deal counts ranging from 47 to 190, the CBN report revealed.
With an average fair value estimate of N1350 per dollar at the year-end, Nigeria’s FX outlook remains moderately constructive as the CBN’s elevated interest-rate environment continues to support foreign portfolio inflows into the fixed-income market.
Sustained high OMO and fixed -income yields are expected to preserve the attractiveness of Nigeria’s real carry trade opportunities, particularly as the CBN maintains a relatively hawkish liquidity -tightening stance through H2 2026, Zedcrest Research said in a report.
Combined with elevated crude oil receipts relative to the federal government’s benchmark assumptions, this transmission mechanism should continue to support medium-term FX stability while improving overall market liquidity conditions within the NFEM framework.
The Nigerian economy recorded additional inflows following the recent OMO bills auction and higher oil receipts from hydrocarbon exports, as well as remittances.
Gross external reserves reached a record high of $52.258 billion on Thursday, according to the latest data updated by the Central Bank, up from $52.198 billion. Accretion into the external reserves has been stable and has been on an uptrend after recent outflows stopped.
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