The naira is expected to remain largely stable over the next six months, while borrowing rates are projected to decline within the same period, according to a Business Expectation Survey report released by the Central Bank of Nigeria.

The report stated that the naira is expected to move from its current index of 28.8 points to 42.2 points over the next six months to May 2026, sustaining a period of rare stability that began earlier this year.

Borrowing rates, according to the report, are expected to slow from 15.4 index points to 11.7 points over the next six months, reflecting the continued downward trend in inflation, which remains the key indicator of monetary tightening.

“Respondents expect the Naira to US Dollar exchange rate to steadily appreciate across the review periods, as indicated by the positive indices. Also, they anticipate a continuous positive outlook for the borrowing rate during the same periods,” the monthly BES report, which surveyed 1,900 businesses across the country, stated.

The Nigerian naira is currently experiencing a prolonged period of stability, a development considered unusual in recent years after the currency lost about 41 per cent of its value last year following the unification of the exchange rate and the subsequent floating of the currency to make it more market-determined.

Although the currency is presently undergoing mild depreciation due to increased foreign exchange demand from local corporates meeting import needs during the festive season, analysts expect the naira to remain stable.

They attribute this outlook to the Central Bank of Nigeria’s measured interventions aimed at managing excess volatility and sustained inflows from foreign portfolio investors.

In efforts to rein in persistently high inflation, monetary authorities have kept benchmark interest rates unchanged since last year and only reduced borrowing rates by half a basis point at the penultimate Monetary Policy Committee meeting for 2025.

This adjustment placed Nigeria’s monetary policy rate at 27 per cent, even as the asymmetric corridors were significantly altered to support credit extension.

With inflation now projected to reach single-digit levels next year from the 14.45 per cent recorded in November, analysts believe the authorities may have clearer justification to begin cutting rates and allow increased credit flow to businesses currently under pressure.

The report also identified insecurity and high multiple taxes as the most significant constraints facing businesses in Africa’s most populous economy, despite companies still grappling with double-digit inflation and foreign exchange volatility.

“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 (5) business constraints in November 2025, highlighting factors that directly impact on operational stability and profitability,” the report noted.

“At the bottom of the top ten constraints were Poor Infrastructure (57.7) and Unfavourable Political Climate (57.7). This suggests that business constraints were more focused on financial factors than political challenges in the review period.”