Top Nigerian Bank Predicts New Naira to Dollar Exchange Rate

• FBNQuest, a merchant Bank, has forecast that the naira will end 2025 above the N1,600 exchange rate
• The financial company cited uneven foreign portfolio inflows, rising global risks as the reasons for its projections
• There is also a projection of positive figures for the Nigerian economy, driven by the services sector and improved GDP following rebasing

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

FBNQuest Merchant Bank has projected that the naira will end the year at N1,662 per dollar, exchange rate.

The Lagos-based research and investment bank’s analysts gave the prediction in its mid-year outlook titled “Steering the Course: From Volatility to Stability."

It noted that the naira has remained relatively stable throughout the year due to sustained Central Bank of Nigeria (CBN) interventions and tight monetary policy.

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The report noted the polices have attracted portfolio investors into Nigeria’s foreign exchange market.

FBNQuest stated:

“The recovery in FPI flows has been uneven, and rising external risks could weigh on sentiment.

"The CBN’s sustained interventions have helped stabilise the currency, but at the cost of depleting reserves. We forecast the naira to end the year at NGN/USD 1,662.”

Since January, the naira has traded within a narrow range, averaging N1,544.25 per dollar, with its strongest level at N1,477.72.

On Friday, July 1 the naira closed at N1,533.74/$, slipping marginally from N1,533.55/$ the day before.

Inflation to hit 32.3% temporarily

In the same outlook, analysts at FBNQuest project that headline inflation will rise to 32.3%year-on-year by December 2025, driven by a low base effect from the December 2024 Consumer Price Index (CPI).

They noted, however, that this surge is technical and does not signal renewed inflationary pressure.

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It said:

“This spike is technical and not indicative of a renewed inflation surge. Beyond this, we expect inflation to resume its gradual decline as price pressures ease.”

GDP growth forecast

FBNQuest also predicts that Nigeria’s economy will maintain its recovery momentum, with annual GDP growth projected at 3.4% in 2025.

This growth will be led by the services sector, particularly financial services and ICT, which are expected to benefit from improved data capture following the recent GDP rebasing.

“We forecast a steady continuation of Nigeria’s economic recovery, with real GDP growth forecast at 3.4% in 2025."

The firm’s projection aligns with the International Monetary Fund (IMF), which also recently upgraded Nigeria’s growth outlook to 3.4%, up from its previous 3% estimate.

Comercio Partners naira to dollar forcast

Earlier, Legit.ng reported that Comercio Partners has projected that the naira could appreciate to below N1,400 per dollar in the Nigerian foreign exchange market.

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This was disclosed in its 2025 H2 economic outlook report titled “reconfiguration: from global trade to quantum innovation – a new economic era emerges."

The two different forecasts by two top firms signal tough months ahead for the Nigerian currency.

Source: Legit.ng