Members of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) are optimistic that the naira will strengthen further, potentially reaching around N1,400 to the US dollar before the end of 2025. Their confidence is anchored on improved oil production, steady capital inflows, and disciplined liquidity management.
In personal statements recently released following the Committee’s July meeting, MPC members expressed optimism about the direction of the foreign exchange market.
Murtala Sabo Sagagi, an MPC member, highlighted the impact of increased crude oil output alongside fresh capital inflows and a stronger balance of payments, saying:
“With higher daily crude oil production, new inflows, and an improved balance of payments, the naira is likely to keep appreciating and could reach the projected N1,400 to $1 by year-end.”
Sagagi also emphasized the importance of continuing to build on recent inflation moderation and the CBN’s persistent efforts to unify the foreign exchange market while managing liquidity carefully. He believes these actions will foster economic growth and improve living standards.
Other MPC members shared similar confidence. Lamido Yuguda pointed to rising foreign exchange reserves, which hit $40.11 billion in July, as a vital buffer that supports exchange rate stability.
Similarly, CBN Deputy Governor Bala Moh’d Bello noted the significant reduction in speculative foreign exchange trading:
“The naira has remained relatively stable due to tighter liquidity conditions, greater investor confidence, and effective implementation of forex management policies. Speculative activity has dropped considerably, creating a more transparent market and encouraging true price discovery. We expect this stability to continue, supported by reserves equivalent to roughly 9.5 months of import cover.”
The MPC reaffirmed its commitment to maintaining relatively high interest rates for a longer period, viewing a tight monetary stance as necessary to consolidate progress in price and exchange rate stability.
At the July meeting, MPC members unanimously voted to hold the Monetary Policy Rate (MPR) steady at 27.5%, citing persistent inflation pressures and ongoing global uncertainties.
CBN Governor Olayemi Cardoso explained that the decision aimed to “protect recent gains in disinflation, exchange rate stability, and improved investor confidence.” Although headline inflation has eased for three consecutive months, dropping to 22.22% in June, Governor Cardoso warned that “core inflation remains sticky, with underlying price pressures elevated due to structural challenges in food and energy supply.”
Deputy Governor Bello echoed the cautious tone, urging Nigeria to “stay the course with a higher-for-longer policy” until inflation expectations are firmly anchored. He pointed out that while economic growth has improved to 3.13% in Q1 2025, “premature easing could threaten the fragile gains we’ve made in reducing inflation.”
Another MPC member, Aloysius Ordu, reinforced the need for a continued tight stance. “There is no such thing as stable double-digit inflation. The current policy is necessary until inflation expectations are fully anchored,” he said, linking disinflation progress to the further development of Nigeria’s domestic capital markets.
