Standard Bank has projected that the Naira will close at N1,458.8/$1 by December 2025, and slightly weaker at N1,473.0 by December 2026, amid improved foreign exchange (FX) reserves, buoyant banking system liquidity, and growing investor confidence in naira assets.
In its latest projection, seen by Naijaonpoint on Saturday, the bank noted that despite persistent risks, the Naira’s performance since mid-September has defied earlier expectations.
According to the report, the currency has appreciated against the US dollar to below N1,500 since September 15, reflecting the Central Bank of Nigeria’s (CBN) sustained efforts to stabilize the market.
“While the risks remain evident, we now again lower our year-end FX forecasts. We see the NGN at 1,458.8 against the USD by this year-end and 1,473.0 by December 2026,” the bank stated.
The report highlighted that Nigeria’s financial system liquidity has been consistently above N1 trillion daily since August 26, averaging N2.8 trillion and reaching N6.38 trillion as of October 7, 2025.
Also, Standard Bank observed a disconnect between excess liquidity and exchange rate depreciation, which has traditionally weakened the naira. The difference, it explained, is that much of the current liquidity is held by corporates and private investors, who are less likely to demand FX amid growing confidence in naira-denominated assets.
The bank credited the CBN with proactive steps to manage liquidity and enhance FX reserves.
According to the report, public sector deposits, typically responsible for exchange rate volatility after FAAC distributions, have been effectively restrained through the 75 percent CRR on non-TSA public sector deposits.
Furthermore, the CBN has reportedly secured the rollover of bilateral transactions worth between $3.0 and $3.5 billion due this quarter, easing near-term pressure on reserves. In addition, International Oil Companies (IOCs) sold $1.6 billion to the CBN in the first nine months of 2025, excluding the $100 million monthly sales to the open market.
“This should continue to support gross FX reserves, thereby increasing the CBN’s ability to support the currency and ensure orderly exits whenever foreign investors exit the market,” the bank stated.
In its earlier projection in September, the bank stated it expects the naira to close 2025 at N1,585.5/$1, compared to its earlier forecast of N1,697.5/$1.
Naijaonpoint reports that the Naira closed the week stronger, appreciating to N1,458/$1 on Friday.