The International Monetary Fund (IMF) says the Naira is still undervalued by 25.6 percent despite the ongoing reforms in the Nigeria’s foreign exchange (FX) reforms.

In its latest Article IV consultation report on Nigeria, the Washington-based institution said its Real Effective Exchange Rate (REER) model showed the local currency was still trading below levels justified by the country’s economic fundamentals.

The REER measures the value of a currency against those of major trading partners after adjusting for inflation.

The IMF said Nigeria’s REER appreciated by 32 percent in 2025, even though the nominal effective exchange rate (NEER) depreciated by 5.2 percent during the period.

According to the report, the official exchange rate appreciated from N1,535/$ at the end of 2024 to N1,435/$ at the end of 2025, representing a gain of about 6.5 percent.

However, on an annual average basis, the Naira weakened from N1,479/$ in 2024 to N1,520/$ in 2025, translating to a depreciation of 2.8 percent.

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