Naira faces fresh pressure due to strong dollar, fuel costs

The naira could face renewed pressure in the near term as a stronger US Dollar, rising petrol costs and persistent foreign-exchange demand complicate the Central Bank of Nigeria’s efforts to maintain currency stability.

Market expectations are tilted towards a cautious monetary-policy stance, with the CBN likely to maintain its benchmark Monetary Policy Rate at 26.5 per cent as policymakers balance moderating inflation against risks from energy prices, exchange-rate pressures and weak economic growth.

The CBN’s Monetary Policy Committee last retained the MPR at 26.5 per cent at its July 20–21 meeting, while also keeping the Cash Reserve Requirement for deposit money banks at 45 per cent. The apex bank said heightened global uncertainties and potential energy-price pass-through warranted a cautious policy stance.

The latest data from the National Bureau of Statistics show that headline inflation eased to 15.39 per cent in August 2026, while food inflation stood at 19.57 per cent and core inflation at 13.29 per cent.

However, the moderation in inflation is being tested by renewed increases in energy and transportation costs. Reuters reported on Monday that petrol prices had risen to about N1,400 per litre in Lagos and Abuja, while diesel prices exceeded N2,000 per litre amid higher global oil prices.

Analysts say the combination of high domestic interest rates and improved foreign-exchange liquidity has provided important support for the naira, but structural demand for dollars could limit further appreciation.

CardinalStone had projected a 2026 naira range of N1,350-N1,450 per dollar, citing improved forex liquidity, stronger external balances and sustained transparency in the foreign-exchange market. Its mid-year assessment also said the currency had largely traded within that range.