Deutsche Bank Recognizes Nigeria's Naira as Undervalued

On October 19, the naira closed at N1,333.76 per US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), a decline of N2 or 0.15% from the previous session's N1,331.76. The naira also weakened against the pound sterling and euro, closing at N1,778.30 and N1,497.41 respectively.

In the parallel market, the naira remained stable at N1,358 per dollar. Trading activity at the interbank level saw a significant drop, with turnover falling by 84.1% to $40.975 million from $258.426 million, and the number of deals decreased from 135 to 59.

Analysts indicated that the naira's short-term direction will depend on foreign portfolio investment and domestic dollar supply. Deutsche Bank included Nigeria in its frontier foreign exchange monitor, describing the naira as undervalued and attractive for investors due to high interest rates.

The bank noted that the naira had appreciated nearly 8% against the dollar in 2026, ranking it among the top 10 best-performing currencies tracked by Bloomberg.