The recent exchange rate forecasts for the USD to NGN indicate a complex interplay of domestic and international factors. As of late August 2025, the USD is trading at 30-day highs near 1537 NGN, remaining just below its three-month average amidst a stable trading range of 4.6% from 1521 to 1591. Analysts suggest this strength in the USD is primarily driven by a risk-averse market, bolstered by safe-haven flows due to increasing geopolitical tensions and trade disputes, such as the escalation of tariffs on Indian goods by the United States.
Factors influencing the USD further include the anticipated U.S. Consumer Price Index report, which is expected to impact Federal Reserve decisions on interest rates, alongside ongoing U.S.-China tariff negotiations. The potential implications of a leadership transition within the Federal Reserve add another layer of uncertainty, with experts highlighting the need for revised economic strategies.
On the other side, the Nigerian naira (NGN) faces headwinds from both domestic challenges and global market pressures. Recent trends have shown the IMF advising Nigeria to adjust its 2025 budget due to falling oil prices, now around $68 per barrel, which is below the budget's assumptions. This adjustment is vital for maintaining fiscal stability as Nigeria is heavily reliant on oil revenues.
Positive steps toward stabilization have been noted, with the World Bank acknowledging the Central Bank of Nigeria's policy reforms that have improved foreign exchange liquidity. However, challenges persist, particularly the recent suspension of local naira sales by Dangote Refinery due to discrepancies in crude purchases, which could further complicate the naira's value.
The African Development Bank (AfDB) has projected a 6% depreciation of the naira amidst ongoing global uncertainties, emphasizing that external market volatility will likely exacerbate already palpable pressures on Nigeria's economy.
Given these dynamics, the outlook for the USD to NGN exchange rate may remain influenced by fluctuations in oil prices and U.S. economic data. With oil trading below its three-month average at $68.05, slightly declining from a highly volatile range, further monitoring of these elements will be crucial for future rate forecasts. Overall, the combination of international relations and domestic policy adjustments will continue to shape the trajectory of the USD against the NGN.
