Naira's Parallel Market Falls to N1,420/$1, Analysts See N1,200 Target

The Nigerian naira's parallel market has dropped to N1,420/$1 from N1,488/$1 two weeks ago, sparking debate about sustainability. Analysts project a reasonable target of N1,200/$1, but the currency's strength is driven by portfolio investment (hot money) rather than real economic output. This contrasts with the Central Bank's aggressive monetary policy (20%+ interest rates) that attracted $16.7 billion in portfolio inflows in 2025, easing inflation to 16% but raising concerns about volatility if investors exit. While a stronger naira offers relief from high import costs, it risks squeezing exporters and states reliant on dollar-denominated FAAC allocations. The key question is whether appreciation stems from production or speculative flows.

SOURCE: https://nairametrics.com/2026/02/15/the-dangers-of-an-appreciating-naira/