NIGERIA’s currency is still trading below its fair value, with fresh estimates showing the naira is about 11 percent undervalued when measured against global purchasing power.
Managing Director of Financial Derivatives Company, Mr Bismarck Rewane, disclosed this at the 2026 Economic Outlook forum hosted by the Association of Corporate Treasurers of Nigeria (ACTN), where he served as keynote speaker.
According to Mr Rewane, the purchasing power parity (PPP)-implied exchange rate placed the naira at approximately N1,256.79 to the dollar. He explained that while currencies might deviate in the short term, they generally adjusted towards their fundamental value over a medium-term period of around five years.
His presentation examined in detail the structural weaknesses and cyclical trends that had continued to shape Nigeria’s foreign exchange market. Mr Rewane also reminded participants that the core duty of corporate treasurers was to ensure efficient use of cash and liquid assets. He urged treasury professionals to strike a balance between optimism and caution, particularly when making decisions linked to foreign exchange (FX) exposure.
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In May 2025, Chief Economist at B. Adedipe Associates, Dr Biodun Adedipe, noted the improvements in major determinants of movements in exchange rate in Nigeria suggested that the naira was undervalued – though the exchange rate was at 1,600/$ at that time.
Renaissance Capital Africa said in 2025 that at 1,303/$, the naira was still largely undervalued to its long-term average by at least 30 percent.
The naira exchange at 1,421.63 to a dollar on Friday, January 23, 2026, from 1,422.07/$ the previous day. Month-on-month, the naira gained 1.96 percent from 1,449.99 reported on December 23.
Naira vs 10 other currencies
Economy Post had earlier compared Nigeria’s currency to 9 others, revealing that the naira is stronger than several currencies in the world, including the Vietnamese dong. Dong exchanges for N1 at VND 17.535. But one United States dollar can buy products worth 26,455 VND in Vietnam as against goods worth N1,422 in Nigeria. Experts say Vietman deliberately sets its curency at low rates to export more of its products.
“SBV is likely to allow the dong to gradually weaken over time, hopefully in a orderly fashion,” said a currency strategist at MUFG Bank in Singapore, Mr Michael Wan, as quoted by Business Times. “But it wouldn’t want the weakness to be too sharp, and it will definitely be ready to intervene to prevent that.”
The naira is stronger than the currency used by the people of Lao People’s Democratic Republic known as the Laotian Kip (LAK). One naira exchanges for 14.49 LAK, with one dollar swapping for 21,681.02 LAK.
Indonesia rupiah exchanges for N0.091 but goes for 16,401.67 IDR to a dollar. Analysis further shows that one naira can buy 8.61 Syrian pound (SYP). A dollar exchanges for 11,530 SYP as against naira’s 1,422. Similarly, N1 exchanges for 8.25 Uzbekistani Som (UZS) as against 12,350.22 UZS to a dollar. On the other hand, the Nigerian currency exchanges for 8.50 Guinea Franc(GNF), but the dollar exchanges for 8,676.04 GNF.
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More so, 1 Nigerian currency can buy goods worth 4.77 Paraguayan guarani (PYG) but a dollar can buy goods valued at 7,108 PYG. Counterfeiting has been a major problem of the currency. Its people are still poor, though the poverty rate has declined in the last decad
Furthermore, Madagascar uses Malagasy Ariary (MGA), which exchanges for 2.94 MGA to 1 naira. A stronger dollar can buy goods worth 4,405.75 MDG in the African nation.
The Cambodia riel (KHR) exchanges for 2.68 to N1 and 4,008.29 KHR to a dollar. Also, the Congolese Franc (CDF) can be swapped for N1.91 as against 2,876.21 CDF to a dollar. Cambodia uses the dollar to make major purchases, which is hurting its local currency, making it a partially dollarised nation. Wages are even paid in US dollars, hurting the economy.
