Experts: Naira Could Strengthen Below N1,000/$ in One Year, N985/$ is Fair Value
Nume Ekeghe The naira could strengthen to below N1,000/$ within the next 12 months, with analysts at MDU Capital Limited putting the currency’s fair value at N984.7/$, according to its
Analysts at MDU Capital Limited believe the Nigerian naira could surpass N1,000 per dollar within the next year, with a fair value estimate of N984.7/$, according to their recent research. The firm's research note, titled “Nigerian Naira: Valuation Gap Points to a Potential Sub-N1,000/$1 Path Over the Next 12 Months,” highlighted a significant discrepancy between the naira's market rate and its estimated fundamental value.
MDU experts explained that their valuation placed the naira at N984.7/$1 (June 2026), which is currently below the N1,000 mark and 29% lower than the parallel market rate of N1,385. The research used three primary methods to determine the fair value: the money-supply model, forward-rate model, and their blended model. The money-supply approach calculated the naira's fair value at approximately N987/$, while the forward-rate estimate stood at around N1,043/$.
Combining these estimates with a 90% weight on the money-supply valuation and 10% on the forward-rate value resulted in a fair value of N984.7/$. MDU Capital attributed the naira's current market pricing above its fundamental valuation to a wide dispersion observed since 2024. Despite this, the firm forecasted a gradual narrowing of the valuation gap, projecting the naira at N933/$ by June 2027 in their "12-Month Outlook: Fair-Value Convergence Scenario."
This projection represents a scenario-based estimate, not a guaranteed forecast or investment recommendation.
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