Standard Bank has revised its medium-term outlook for the Nigerian naira, projecting a 3.1 percent depreciation against the United States dollar in 2025. The updated forecast, however, reflects a stronger exchange rate than earlier anticipated, suggesting improved stability in Nigeria’s currency market.
According to the bank’s latest report, obtained by Nairametrics on Wednesday, the naira is now expected to close 2025 at ₦1,585.5 to the dollar. This marks a significant adjustment from the bank’s previous forecast of ₦1,697.5/$1.
The revision follows what Standard Bank described as “new evidence” from Nigeria’s foreign exchange market and broader macroeconomic conditions in recent months. These developments, the bank explained, point to a more resilient currency trajectory than initially projected.
Analysts at the institution highlighted factors such as recent policy measures by monetary authorities, adjustments in foreign exchange supply channels, and improvements in investor sentiment as key drivers of the outlook shift. The report also noted that while the naira remains under pressure, ongoing reforms are beginning to create conditions for greater market stability.
The naira has faced intense volatility since the unification of Nigeria’s exchange rate windows in 2023, which triggered sharp fluctuations in both official and parallel market rates. Policymakers have since intensified efforts to attract dollar inflows, boost reserves, and strengthen monetary policy interventions to stabilise the local currency.
With the revised outlook, Standard Bank appears cautiously optimistic that Nigeria’s currency could avoid the steeper depreciation previously forecast. However, the bank maintained that risks tied to global oil prices, foreign capital inflows, and domestic inflation trends could still weigh on the exchange rate in the year ahead.
