Naira to Weaken Modestly in 2026, BMI Projects
The Nigerian naira has strengthened in early 2026, closing at N1,358/$1 and gaining 5.8% year-to-date. However, BMI predicts a modest depreciation to N1,550/$1 by year-end, citing temporary strength and underlying FX pressures. The currency's first annual gain since 2012 (7.4% in 2025) may not sustain, as easing inflation (23.3% to 14.5%) could increase demand for foreign exchange. Nigeria's reserves have risen above $47 billion, supporting stability, but the parallel market shows 6-7% weakness, indicating overvaluation. This follows a 2025 turnaround from N1,602/$1 lows to N1,429/$1 year-end. Global FX stability in Sub-Saharan Africa (SSA) is expected, with the naira outperforming the rand and kwacha. Will you monitor exchange rates for travel or business planning?