The naira has been projected to weaken between N1,650 and N1,700 in mid-2026, due to expected pressure driven by lower crude oil prices and new monetary easing cycle.

This is the view of David Cowan, Citibank African economist in a note to clients on Wednesday, September 24, 2025.

In the note, he stated that Nigeria will begin new monetary easing cycle next year, BusinessDay reports.

Cowan said:

“If, as we expect, inflation starts to ease next year and the CBN starts to more aggressively ease its tight monetary policy stance, we would expect some modest pressure on the naira as 2026 progresses."

Naira to dollar exchange rate

The naira’s stability, appreciating by almost 4 percent so far in 2025, also helped cool inflation.

The year-long rally that lifted the naira to a more than seven-month high has been driven by stronger oil exports.

But Citi cautioned that weaker oil prices next year could weigh on Nigeria’s foreign exchange earnings and amplify pressure on the currency.

His projection is a sharp contrast to the performance of the naira in both the official and unofficial markets.

Data shows that the naira strengthened slightly on Wednesday, September 24, to close at N1,488.56/$1 in the Nigerian Foreign Exchange Market (NFEM).

Latest exchange rate is a 36 kobo or 0.02% appreciation against the United States dollar compared with Tuesday’s rate of N1,488.92/$1.

The naira also appreciated against other major currencies in the same window. It gained N10.29 against the pound sterling to close at N2,001.08/£1, up from N2,011.37/£1 the previous day.

While against the euro, it improved by N7.07, settling at N1,747.28/€1 compared with Tuesday’s N1,754.35/€1.

CBN cut MPC rate, Oil prices

The Central Bank of Nigeria on Tuesday, cut key interest rates by 50 basis points to 27%, the first reduction in five years, as inflation begins to taper.
It also signaled further cuts if the disinflationary trend is sustained.

Inflation in Africa’s top crude oil producer slowed for the fifth straight month in August, dropping to 20.12 percent from 21.9 percent in July, supported by easing food and energy costs after months of sharp increases.