As we cross the threshold into 2026, the biggest question on the minds of investors, importers, and everyday Nigerians is: What is the future of the Naira? After a year of intense fluctuations and major policy shifts by the Central Bank of Nigeria (CBN), the outlook for the Naira to Dollar exchange rate is becoming a central point of economic debate.
The ₦1,400 Psychological Barrier
Throughout 2025, the Naira showed remarkable resilience, moving from the volatile ₦1,600+ range to a more stable ₦1,450. Financial analysts now suggest that ₦1,400 is the next major psychological support level. If the CBN maintains its current momentum, there is a strong possibility that the Naira could trade between ₦1,350 and ₦1,380 by the end of Q1 2026.
Key Factors Driving the Forecast
Several factors are aligning that could favor a stronger Naira in the coming months:
- Increased Crude Oil Production: With local refineries like the Dangote Refinery hitting full capacity, Nigeria’s reliance on importing refined petroleum with USD has plummeted, significantly reducing the demand for Dollars.
- Foreign Reserve Accretion: Nigeria’s foreign reserves have seen a steady climb, currently sitting at approximately $45.48 billion. A healthy reserve gives the CBN the “firepower” to intervene in the market whenever the Naira comes under pressure.
- Consistent Interest Rates: The Monetary Policy Committee (MPC) has kept interest rates high to attract foreign investors. This “carry trade” makes the Naira more attractive to global fund managers.
The Downside Risks
However, the road to ₦1,400 is not without hurdles. Global economic shifts, such as changes in the US Federal Reserve’s interest rates or a sudden drop in global oil prices, could put fresh pressure on the Naira. Furthermore, the rising cost of servicing foreign debts remains a weight on the national budget.
Expert Verdict
The general consensus among financial experts is “Cautious Optimism.” While a sudden crash of the Dollar is unlikely, a gradual and sustained appreciation of the Naira is the most probable scenario for 2026.
