Deutsche Bank adds Nigeria to frontier FX watchlist

Following improved exchange rate and strong economic indices, Deutsche Bank AG has added Nigeria to its frontier foreign exchange monitor.

The development signals growing investor interest in the naira as well as the belief the currency could strengthen further against the US dollar.

The German multinational bank considers the naira undervalued and attractive for carry-trade investors seeking to profit from differences in interest rates between currencies.

According to Nairametrics Research, the naira appreciated by 0.45% against the U.S. dollar in September, strengthening from N1,335.50/$ at the end of August to N1,329.50/$ at the end of September.

The naira closed September N6 stronger against the U.S. dollar, extending its positive performance in the month after showing relative resilience in 2026.

According to Bloomberg, strategists and economists at the Frankfurt-based lender see the naira as undervalued, with attractive carry opportunities and favourable real interest rates supporting its outlook.

Deutsche Bank expects fiscal spending to increase ahead of Nigeria’s January elections but sees “less risk from the elections themselves.”

Deutsche Bank’s decision comes weeks after global index provider FTSE Russell reclassified Nigeria from Unclassified to Frontier Market status from September 21, 2026.

Nigeria was removed from FTSE Russell’s Frontier Market indices in September 2023 following persistent difficulties by international investors in repatriating capital and executing foreign exchange transactions.

The reclassification could improve Nigeria’s visibility among international investors whose investment decisions are influenced by benchmark indices.

Deutsche Bank’s inclusion of Nigeria in its frontier FX monitor adds to the positive signals surrounding the currency.