₦airaland Forum

The International Monetary Fund (IMF) has revealed what it considers the "fair value" of the Nigerian naira, saying the local currency remains significantly undervalued despite recent gains against the United States dollar across official and parallel foreign exchange markets.

In its latest assessment of Nigeria's economy, the Washington-based lender said the naira is trading about 25.6 per cent below its value based on the country's economic fundamentals, even after recording a notable recovery following sweeping foreign exchange reforms introduced by the Federal Government.

According to the IMF's latest Article IV Consultation Report, the naira's current exchange rate does not fully reflect improvements in Nigeria's external position and macroeconomic adjustments.

The Fund explained that its Real Effective Exchange Rate (REER) model, which compares a country's currency against those of its major trading partners while adjusting for inflation, indicates that the naira remains weaker than it should be, TheCable reported
"Despite the REER appreciation that has already taken place in 2025, the EBA-lite REER model indicates a REER gap of -25.6 percent," the IMF stated. Based on this assessment, the institution estimated that the naira should have traded at approximately N1,142.04 per dollar using the exchange rate at the end of 2025.

Based on the average exchange rate for the year, the currency's fair value was estimated at approximately N1,130.88 per dollar. The figures are stronger than the prevailing official exchange rate, which stood at N1,356.27/$ as of Monday, June 14, 2026.

The IMF acknowledged that the naira has made significant progress following Nigeria's foreign exchange reforms.

According to the report, the official exchange rate improved from N1,535/$ at the end of 2024 to N1,435/$ at the end of 2025, representing an appreciation of about 6.5 per cent. However, on an average annual basis, the naira still weakened slightly, moving from N1,479/$ in 2024 to N1,520/$ in 2025, a depreciation of about 2.8 per cent.

The Fund also noted that Nigeria's Real Effective Exchange Rate appreciated by 32 per cent in 2025, even as the Nominal Effective Exchange Rate depreciated by 5.2 per cent, suggesting that the naira's underlying strength may be improving faster than its nominal exchange rate indicates. Tinubu's FX reforms continue to shape the market The IMF's assessment comes nearly three years after President Bola Tinubu's administration introduced far-reaching reforms to Nigeria's foreign exchange market in June 2023. The reforms abolished the country's multiple exchange-rate windows and allowed the naira to trade more freely in a market-driven system. While the move initially triggered a sharp depreciation of the currency and increased inflationary pressures, authorities argued that it was necessary to restore investor confidence, improve market liquidity and attract foreign capital into the economy.
IMF advises CBN to slow reserve accumulation Despite the naira's recent recovery, the IMF urged the Central Bank of Nigeria (CBN) to maintain exchange rate flexibility and avoid excessive accumulation of foreign reserves.
According to the Fund, allowing the naira to move in both directions based on market forces, while strengthening foreign exchange market operations and implementing broader economic reforms, would help close the valuation gap over time. "Given the assessed REER undervaluation, slowing the pace of reserve accumulation and continuing to allow two-way movement of the naira exchange rate, combined with strengthening FX market functioning and advancing fiscal and structural reforms, would help close the gap," the IMF said.
he latest assessment is likely to fuel fresh debates over the naira's true value and whether ongoing reforms will ultimately deliver a stronger, more stable Nigerian currency. Nigeria’s external reserves cross $50 Legit.ng earlier reported that the Central Bank of Nigeria has revealed that Nigeria's external reserves increased to $50.42 billion as of June 10, 2026.
The latest increase from $50.11 billion in reserves on June 5, 2026, built on an upward momentum that has seen reserves sustain above the $50 billion level in recent sessions.
The CBN stated that Nigeria's external reserves continue to strengthen following continued flows, driven by higher earnings on oil, diaspora inflows and return of foreign portfolio investments to the market

ogolemati:
make everyone relax make that snatcher grabber and ran away criminal win next election, dollar will hit 2500 and above

DeltaBachelor:
Chai. When will this thing come down to what it was during “Jonathan’s regime” . That’s the million dollar question o

insidelife22:
Data boys must chop
Oya go change am at that rate

Amovingman:
Peter Obi will turn 1 dollar to 1 naira next year bri

Jorussia:
It's actually between #950-#1000.The govt needs to increase oil production to offset differential when it's allowed at true value.At #1000 a liter of PMS can't be more than #800 at current geopolitical realities.

Lanruze:
The IMF has magnified what average Economist with expertise in Public Finance has known since PBAT became President and after his FX Reforms kicked-in.

Cmeo:
I believe this Tinubu government is deliberately keeping the dollar at the current rate of 1,300 Naira to safe some business and make more money to settle it's naira obligations.

True worth of a Dollar now is about 980 Naira but as the government is one of the most earner and seller of dollar, they deliberately keep the dollar price higher so that they can collect more Naira to settle Naira obligations and possibly not to devalue the stock of people not yet sold that had been imported at costly dollar value.

Urgent1Million:
They have come again with their statistics.
Now that I've decided to keep my money in USD and bring it to naija to exchange, they're suggesting that the rate may fall further.
What manner of information is this bawo!
Hia!!!!!!!

Charlie2020:
IMF just want Nigerians pauperised. Haven't we suffered enough? 25% undervalued!!! IOW, the want the Naira to exchange at approx $/1800