The Nigerian naira has strengthened against the US dollar in both the official and parallel foreign‑exchange markets following the Central Bank of Nigeria’s decision to cut interest rates by 50 basis points to 27 percent—the first such reduction since 2020. According to central‑bank data, the naira appreciated to N1,487.37 per dollar on Tuesday, a gain of N1.23 from the previous day’s rate of N1,488.60. In the black market, the currency also firmed, rising N2 to trade at N1,520 per dollar, up from N1,522 on Monday, after a slight dip at the start of the week.
The Central Bank’s Monetary Policy Committee attributed the rate cut to evidence of improved macro‑economic stability, citing months of disinflation, output growth, a stable exchange rate and robust external reserves. Apex bank governor Olayemi Cardoso said the decision was based on positive trends in these key indicators, adding, “The MPC expressed satisfaction with the prevailing macroeconomic stability evidenced by the improvements in several indicators, including sustained disinflation, improved output growth, stable exchange rate, and robust external reserves.”
External reserves have continued to rise, reaching $42.13 billion on 22 September 2025, up from $42.03 billion the day before. The interest‑rate reduction and the subsequent appreciation of the naira are significant developments in Nigeria’s economic landscape. The move is expected to positively affect the money market and could influence investment and trade activities. As the economy evolves, the Central Bank’s monetary‑policy decisions will be closely watched for their impact on the naira and the broader economy, with the trajectory of external reserves serving as an important gauge of the country’s economic health in the days ahead.
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