German multinational bank, Deutsche Bank has expressed strong optimism regarding the naira, adding the currency to its foreign exchange monitor while forecasting potential further appreciation.
According to Bloomberg, strategists at the 156-year-old financial institution view the Nigerian currency as undervalued, offering attractive carry alongside real rates.
The naira closed recently at N1,333.72 per dollar, supported by a robust external position that has pushed foreign exchange reserves above the $55 billion mark. Having already gained nearly eight percent against the dollar through 2026, the currency is heading toward its best annual performance in almost a decade.
While global capital inflows have been bolstered by higher oil revenues, increased diaspora remittances, and improved liquidity arising from the economic reforms of President Bola Ahmed Tinubu, Deutsche Bank cautioned that fiscal pressures could pose risks.
Strategists pointed to the Debt Management Office’s elevated bond issuance calendar and anticipated increases in government spending ahead of upcoming elections as key factors to watch.
However, the bank noted that fiscal policy and borrowing requirements present a more significant variable to the currency’s outlook than the political transition itself, as broader market surveys project the naira to extend its year-to-date gains toward a 12 percent full-year appreciation.
