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The short answer
The IRS has no official exchange rate and generally accepts any posted rate used consistently; it says to use the rate on the day you receive, pay or accrue an amount. Its yearly average table, reviewed in September 2026, has no naira row, so for naira you need a published source such as the Central Bank of Nigeria's rates, applied the same way every year. Foreign account reports use an end-of-year rate instead.
What the IRS actually says
The IRS page on yearly average currency exchange rates, last reviewed 17 September 2026, makes four points that matter for naira:
- The IRS has no official exchange rate and generally accepts any posted exchange rate that is used consistently.
- In general, use the exchange rate prevailing (the spot rate) when you receive, pay or accrue an item.
- To convert a foreign amount to dollars, divide it by the applicable rate expressed as units of foreign currency per dollar.
- For currencies not in the yearly average table, it refers you to its general page on foreign currency, or to any other published rate used consistently.
When we checked the table in October 2026, it had no row for the Nigerian naira for any of the years shown. So the shortcut many expats use for euros or pounds is not available for naira.
Which rate for which item
| Item | Rate generally used | Why |
|---|---|---|
| One-off income, such as a sale or a lump sum | Spot rate on the day received | The IRS default |
| Recurring income, such as monthly interest or rent | Spot rate each time, or an average rate applied consistently | Taxes for Expats notes average rates are acceptable for recurring rental income |
| Cost of buying property | Spot rate on the date paid | Basis is fixed when you pay |
| Nigerian tax paid | Rate on the date paid, consistently with the related income | Keeps the credit aligned with the income |
| FBAR account values | End-of-calendar-year rate | IRS comparison table |
| Form 8938 asset values | End-of-taxable-year rate | IRS comparison table |
Where to find a naira rate you can cite
Choose one published source and use it every year:
- Central Bank of Nigeria. The CBN publishes monthly average exchange rates of the naira on its website, with an Excel export. The columns shown include historical series such as DAS, IFEM and BDC dollar rates as well as sterling and euro; check which series covers the year you need.
- Your bank's rate. If the money was actually converted, the rate on the conversion confirmation is the most accurate for that transaction.
- A widely published market source, provided you note the source and date and use the same one every year.
Nigeria has had periods when official and parallel market rates were far apart. Whatever source you use, the important points are that it is published, that you record it, and that you do not switch between sources to get a better result.
A worked example
Example only. The rates below are invented to show the arithmetic and are not real rates. Funmi receives Nigerian interest of ₦150,000 on 31 March and ₦160,000 on 30 September. Using her chosen source, the rates on those dates are ₦1,500 and ₦1,600 per US$1.
| Date | Naira | Rate (₦ per US$1) | US$ |
|---|---|---|---|
| 31 March | 150,000 | 1,500 | 100 |
| 30 September | 160,000 | 1,600 | 100 |
| Total | 310,000 | 200 |
She divides each naira amount by the rate, as the IRS describes, and reports US$200 of foreign interest. She keeps a note of the source and dates in her tax file. For year-end FBAR values she uses the end-of-year rate instead (the FBAR naira rate).
Common mistakes
- Multiplying instead of dividing. With a rate quoted as naira per dollar, divide the naira amount by the rate. Multiplying gives an absurd dollar figure that a preparer should catch, but not always.
- Mixing sources. Using a market rate for income and an official rate for tax paid, or switching source between years, makes the return hard to defend.
- Using one rate for everything. Account reports use end-of-year rates; income and expenses generally use the rate on the day. Keep the two separate.
- Converting a property purchase at today's rate. The cost basis uses the rate on the date you paid, which may be years ago and very different.
- Leaving no trail. If you cannot show where a rate came from, it is hard to show the figure is right.
What to keep in your records
- The name and web address of the rate source.
- The date and rate used for each conversion.
- Bank confirmations for any actual conversions.
- A one-line note of your method, such as "spot rate on date received, CBN source", repeated each year.
For how converted figures feed into a return, see US tax on Nigerian rental income and the foreign tax credit.
Where Pryme fits
When you convert between naira and dollars with Swap, the app shows the rate first and the fee on its own line before you approve, and the confirmation records the rate actually used. Pryme customers can also generate a verifiable statement through VerifyDoc.ai as a record of each conversion (receipts and statements).
Questions people ask
What exchange rate does the IRS use for naira?
The IRS has no official rate. It accepts any posted rate used consistently and generally expects the rate on the day you receive or pay an amount.
Is the naira on the IRS yearly average exchange rate table?
No. When checked in October 2026, the IRS table had no naira row, so you need another published source.
Can I use the CBN rate on my US tax return?
The CBN publishes monthly average naira rates. A published source used consistently is generally acceptable to the IRS; record the source and dates.
Do I divide or multiply to convert naira to dollars?
Divide the naira amount by the rate expressed as naira per US dollar, as the IRS describes.
Sources
- IRS: Yearly average currency exchange rates (reviewed 17 Sep 2026) · accessed Oct 2026
- Central Bank of Nigeria: monthly average exchange rates of the naira · accessed Oct 2026
- Taxes for Expats: foreign rental property depreciation (updated 29 Apr 2026) · accessed Oct 2026
- IRS: Comparison of Form 8938 and FBAR requirements (reviewed 19 Sep 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.