Coronation Projects Naira to Trade at N1,400/$ in H2 2026

Coronation Research analysts forecast the Nigerian Naira will trade at N1,400 to the U.S. dollar in the latter half of 2026, predicting a gradual depreciation by year-end. The Naira's performance in the first half of 2026 surpassed the company's earlier projection, closing at an average of N1,365 against the dollar.

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The principal deviations, a more cautious MPC and a stronger naira, both stemmed from the same source: Nigeria’s improved yield differential attracted record portfolio inflows ($10.37billion in Q1, +83.8per cent y/y), giving the CBN room to prioritise credibility over speed while still delivering currency stability.

This outperformance was attributed to substantial foreign portfolio inflows into Open Market Operation (OMO) bills and fixed-income securities, driven by attractive real yields. Improved foreign exchange liquidity, Central Bank of Nigeria interventions, and elevated crude oil prices, despite weaker production volumes, also supported the currency. The non-oil sector's fiscal and foreign exchange position, accounting for 96 percent of GDP, still relies heavily on oil prices.

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Our base case assumes Brent stabilises below $80/bbl as the peace memorandum holds. If that normalises the price windfall while domestic crude output stays soft, the combined effect would pressure fiscal and foreign exchange suffers even as headline GDP keeps expanding.

Analysts highlighted six critical swing factors for the second half of 2026, with the potential for oil price stabilization below $80 per barrel being a primary concern. A return to normal oil prices, coupled with soft domestic crude output, could pressure fiscal and foreign exchange reserves. Other factors include S&P's upgrade of Nigeria to B and potential upgrades from Fitch and Moody's, contingent on fiscal transparency. The current Monetary Policy Rate balances carry-trade inflows against strains on the real sector.

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Fixed income elevated stop rates (18.3per cent+ on long bonds) offer attractive entry points for investors able to lock in duration ahead of an eventual easing cycle.

Opportunities exist in fixed income, with elevated stop rates offering attractive entry points for investors anticipating an easing cycle. However, a defensive stance in short-duration instruments is advised due to heavy sovereign supply. The report suggests hedging foreign exchange exposure into the fourth quarter of 2026, while noting that non-oil resilience favors sectors like ICT, trade, agriculture, and select industrial companies.

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naira stability through H1 2026 supports import dependent and naira-denominated positioning, but the H2 drift toward N1,400 against the dollar argues for hedged foreign exchange exposure into the fourth quarter (Q4) of 2026.