Naira To Appreciate To N1,350 Before December, Says CardinalStone

Nigeria’s naira could strengthen to between N1,350 and N1,450 per dollar in 2026 as improving macroeconomic fundamentals, enhanced foreign exchange (FX) liquidity and policy reforms combine to support currency stability, according to CardinalStone Partners.

The projection is contained in the investment firm’s 2026 economic outlook report titled “Indicators Align for Sustained Macro Gains,” released on January 6, 2026.

The report outlines expectations of currency appreciation, easing inflationary pressures and softer domestic energy prices, even as risks from global oil market dynamics and domestic insecurity persist.

CardinalStone said recent reforms in Nigeria’s FX framework are beginning to improve transparency and depth in the market, boosting investor confidence and supporting capital inflows.

These developments, the firm noted, are expected to strengthen the naira despite forecasts of a weaker global crude oil market.

“We expect the naira to appreciate to a range of N1,350.00/$ – N1,450.00/$ in 2026, supported by improving fundamentals,” the report stated, citing moderating inflation, improved FX liquidity and sustained policy reforms as key drivers of the outlook.

Although CardinalStone expects global crude oil prices to come under pressure in 2026 due to oversupply and subdued demand, it believes Nigeria’s FX position could remain relatively resilient.

Lower oil prices typically weaken Nigeria’s foreign exchange earnings, given its dependence on oil exports.

However, the firm argued that structural improvements in the FX market could help cushion the impact of softer oil revenues.

“Elsewhere, due to oversupply and weaker demand, crude oil prices are likely to be lower,” the report noted, adding that the evolving FX market architecture could help mitigate external shocks.

The report also forecasts a more favourable domestic energy price environment in 2026.

CardinalStone expects that declining global oil prices, combined with a stronger naira, will lead to further easing in the prices of key petroleum products, including Automotive Gas Oil (AGO) and Premium Motor Spirit (PMS).

“The weak oil price, coupled with an improving FX outlook, should further drive down the domestic prices of AGO and PMS,” the firm said.

In addition, CardinalStone highlighted increased competition in Nigeria’s downstream petroleum sector, particularly between local refineries and fuel importers, as a positive factor for energy price stability.

Greater domestic refining capacity and competitive dynamics, the report said, could help moderate fuel costs and reduce price volatility.

On inflation, CardinalStone projects a gradual moderation in 2026, supported by easing energy prices and improved currency stability.

Headline inflation is forecast to average 15.5 per cent during the year before declining to 13.9 per cent by year-end.

However, the firm cautioned that rising insecurity, especially in key food-producing regions, remains a significant downside risk.

Persistent security challenges could disrupt agricultural output and constrain food supply, potentially slowing the pace of disinflation.

“Nonetheless, we note the increased traction of insecurity as a risk factor, especially in food-producing regions, which could limit food supply,” CardinalStone warned.

Overall, the report strikes a cautiously optimistic tone, with improving macroeconomic fundamentals and structural reforms expected to support the naira and ease inflationary pressures in 2026, even as external oil market headwinds and domestic security concerns continue to pose challenges for Nigeria’s economic outlook.

Naira To Appreciate To N1,350 Before December, Says CardinalStone is first published on The Whistler Newspaper