The Nigerian Naira has strengthened against the US dollar in both official and parallel foreign exchange markets. This follows the Central Bank of Nigeria’s decision to reduce interest rates by 50 basis points to 27 percent, marking the first such move since 2020. According to data from the Central Bank of Nigeria, the Naira appreciated to N1,487.37 per dollar on Tuesday, representing a gain of N1.23 from the previous day’s rate of N1,488.60.
In the black market, the Naira also firmed up, gaining N2 to trade at N1,520 against the dollar, up from N1,522 on Monday. This upward movement comes after the currency had slightly dropped at the start of the week. The Central Bank of Nigeria’s Monetary Policy Committee attributed the interest rate cut to evidence of improved macroeconomic stability, including months of disinflation, output growth, a stable exchange rate, and robust external reserves.
The apex bank governor, Olayemi Cardoso, noted that the decision was based on positive trends in several key indicators. “The MPC expressed satisfaction with the prevailing macroeconomic stability evidenced by the improvements in several indicators,” he said. “These include the sustained disinflation, improved output growth, stable exchange rate, and robust external reserves.” The country’s external reserves have continued to surge, reaching $42.13 billion on September 22, 2025, a rise from $42.03 billion the previous day.
The interest rate reduction and subsequent appreciation of the Naira are significant developments in Nigeria’s economic landscape. The move is expected to have a positive impact on the money market, potentially influencing investment and trade activities. As the country’s economy continues to evolve, the Central Bank of Nigeria’s decisions on monetary policy will be closely watched for their effects on the Naira and the broader economy. With the external reserves on an upward trend, the Naira’s performance against the dollar will be an important indicator of the country’s economic health in the coming days.
