The naira is expected to remain below the N1,400 to the dollar mark through the festive season, with the official rate projected to hold within the N1,290–N1,400 zone for the rest of the year.

The Nigerian Autonomous Foreign Exchange Market (NAFEM) rate has traded comfortably around N1,350/$, underpinned by rising foreign reserves, stronger diaspora remittances and stable crude oil output.

Nigeria’s foreign exchange reserves stand at multi-year highs above $55 billion, providing sufficient liquidity to meet medium-term needs. A high real interest rate environment, with the Monetary Policy Rate at 23 per cent, further cushions the naira against the sharp downside risks seen in earlier periods.

These factors have supported relative stability in the official window even as seasonal demand builds.

Market activity shows a near-term balance between Central Bank foreign exchange supply and demand at the official rate, which has narrowed around N1,355/$. Analysts note, however, that seasonal pressure could test this tightness later in the fourth quarter as importers and retailers stockpile goods such as food, electronics and clothing ahead of December festivities. Travel-related demand for dollars is also expected to rise.

The parallel market continues to trade at a premium, currently around N1,390/$. Sustained demand leakages into the informal market suggest that some tightness could reappear in the official window if liquidity buffers ease. Official rates remain close to N1,349/$, but the spread with the black market could widen toward year-end under heavier seasonal pressure.

Increased remittances from the Nigerian diaspora are expected to provide additional foreign-exchange liquidity during the holiday period, helping to cushion against sharper depreciation. The Central Bank remains active in the official window to moderate volatility and keep the gap between NAFEM and parallel rates in check. High yields in the domestic debt market are also intended to attract foreign portfolio inflows and support reserve stability.

Technical analysis places resistance for the naira at around N1,280/$ on the official market. A breach of that level would likely trigger significant Central Bank intervention. Overall, market forecasts point to a range-bound performance for the remainder of the year, with the naira expected to stay below N1,400/$ through the festive season.