The Naira could appreciate to about N1,290 against the U.S. dollar before the end of 2026 if current macroeconomic conditions remain favourable, according to Ifeanyi Ubah, Chief Investment Officer of V&L Capital Asset Management.
Speaking on Business Week on Arise News, Ubah said disciplined monetary policy, declining speculative demand for foreign exchange and stronger external fundamentals are gradually improving the naira’s outlook.
“We could see naira appreciate towards N1,300 to around N1,290 by year-end if everything holds steady,” he said, while cautioning that the forecast remains dependent on domestic policy consistency and global economic conditions.
The projection comes as Nigeria’s foreign exchange market has witnessed a sharp decline in turnover following an earlier surge driven by Eurobond issuances and private capital raising. Rather than viewing the slowdown as a negative signal, Ubah argued that it reflects the fading of temporary demand pressures that had weakened the naira.
“When we saw that uptick in FX turnover, we definitely saw a depreciation of our currency. That turnover wasn’t sustainable initially,” he said.
“Most anticipation is that the appreciation of the Nigerian currency against the U.S. dollar will keep on holding trajectory.”
He also credited the Central Bank of Nigeria’s monetary tightening with reducing speculative demand for dollars.
“The CBN governor has made sure that there’s nothing incentivizing big players from holding foreign currencies,” Ubah said, adding that the absence of attractive dollar-denominated opportunities has naturally reduced market activity without undermining confidence in the naira.
He further noted that the World Bank estimates the naira’s fair value at around ₦1,100 per dollar, suggesting there remains room for appreciation if current reforms continue.
Impact of Oil Prices on Reserves
Ubah noted renewed geopolitical tensions in the Middle East could prove both beneficial and challenging for Nigeria.
“The war not being over is negative,” he said. “But Nigeria is an oil-exporting country, so the positive movement in oil prices benefits us.”
He explained that higher crude prices have supported Nigeria’s external reserves, now above $51 billion, while recent reforms have helped curb speculative pressure in the foreign exchange market.
“A huge part of it is actually the price of oil. The reforms around reducing speculation in the FX market have also helped,” he said.
While acknowledging that macroeconomic indicators have improved, Ubah said many Nigerians have yet to experience the benefits.
“The data points to a growing and positive economy,” he said. “The average Nigerian doesn’t see this reform because there’s what they call a policy lag, and it takes time for it to trickle down.”
He however warned that inflation risks remain, particularly from food prices and global energy markets.
