- Naira Set to Strengthen, Borrowing Ratesto Fall in Next Six Months – CBN Survey
- The naira has maintained an unusually long stretch of stability in recent months
- The Monetary Policy Rate (MPR) currently stands at 27%
The naira is projected to remain largely stable over the next six months, while borrowing costs are expected to decline as inflation continues to moderate, according to the latest Business Expectations Survey (BES) released by the Central Bank of Nigeria (CBN).
Eko Hot Blog reports that the survey indicated that respondents expect the naira to strengthen from an index of 28.8 points currently to 42.2 points by May 2026, extending the rare period of currency stability recorded in 2025.
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Similarly, borrowing rates are anticipated to ease, with the index declining from 15.4 points to 11.7 points, reflecting expectations of softer monetary conditions as inflation pressures subside.
“Respondents expect the naira–US dollar exchange rate to steadily appreciate across the review periods, as indicated by the positive indices. They also anticipate a continuous positive outlook for borrowing rates during the same periods,” the BES report, which surveyed about 1,900 businesses nationwide, stated.
The naira has maintained an unusually long stretch of stability in recent months, following sharp volatility in 2024 when the currency lost about 41% of its value after the unification of exchange rates and the move to a market-determined system.
Although mild pressures have emerged due to increased foreign exchange demand by local corporates to meet import obligations during the festive season, analysts expect stability to be sustained. This outlook is supported by the CBN’s calibrated interventions and continued inflows from foreign portfolio investors.
To contain inflation, the CBN has maintained a tight monetary stance, keeping benchmark interest rates largely unchanged since last year, with only a marginal 50-basis-point cut at its penultimate Monetary Policy Committee (MPC) meeting in 2025.
The Monetary Policy Rate (MPR) currently stands at 27%, even as asymmetric corridors were adjusted to support credit expansion.
With inflation projected to decline to single-digit levels in 2026, down from 14.45% in November 2025, analysts believe monetary authorities may have greater room for a gradual easing cycle, potentially improving credit access for businesses.
Despite the improving macroeconomic outlook, the BES highlighted persistent structural challenges for businesses, with insecurity and high, multiple taxation ranking as the most significant constraints.
“Respondents identified Insecurity (70.1), High/Multiple Taxes (69.7), Insufficient Power Supply (69.3), High Interest Rate (67.2), and Financial Problems (64.7) as the top five business constraints in November 2025,” the report noted.
Other key challenges included poor infrastructure and an unfavourable political climate, both scoring 57.7 points.
The report further observed that business concerns during the review period were more focused on financial and operational challenges rather than political risks, underscoring the need for sustained reforms to improve the business environment.
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