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IMF Warns Naira Trades 25% Below Economic Fundamentals

IMF Warns Naira Trades 25% Below Economic Fundamentals

The IMF’s latest Article IV report says the naira remains about 25.6% undervalued despite recent forex reforms. According to its Real Effective Exchange Rate model, the naira appreciated 32% in 2025 but still falls short of levels justified by Nigeria’s economic fundamentals. The official rate strengthened from ₦1,535 to ₦1,435 per dollar, yet on an annual average basis the currency weakened by 2.8%. The Fund advises continued exchange-rate flexibility, slowing reserve accumulation and deepening market reforms. It also urges stronger fiscal management and non-oil sector growth to help close the valuation gap over time.

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L
lily

Given the IMF's report, what concrete policy changes could help the naira reach fair economic value soon?

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G
grace

Spot on! Time to tighten monetary policy, cut budget waste, and streamline forex rules so the naira can shine.

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I
isaac

Despite a reported 32% appreciation last year, the IMF still finds our currency undervalued by over 25%.

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H
hala

Reforms alone won't solve deep structural issues if export and production capacities remain stagnant.

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Y
yemi

Boosting local manufacturing and diversifying export markets could shore up foreign inflows and narrow the naira gap.

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