The Naira posted modest gains across the foreign exchange market on Tuesday, appreciating to N1,441/$1 following the conclusion of the 303rd Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).
This marks an improvement from N1,452/$1 recorded on Monday, according to updated figures on the CBN’s website.
The appreciation comes as the CBN sustained its aggressive monetary tightening aimed at stabilising the FX market and curbing persistent inflationary pressures.
During the two-day meeting held in Abuja, MPC members voted to maintain all key policy indicators, reinforcing the apex bank’s commitment to restoring macroeconomic stability.
Key MPC decisions
At the meeting, the CBN retained the Monetary Policy Rate (MPR) at 27 percent, keeping it at its highest level in recent history.
The MPR, which anchors lending rates across the financial system, has been elevated for months as part of the Bank’s strategy to tackle soaring inflation and mitigate currency volatility.
Other policy parameters were also kept unchanged:
- Cash Reserve Ratio (CRR) remains 45.00% for Deposit Money Banks (DMBs) and 16.00% for Merchant Banks.
- Liquidity Ratio (LR) stays at 30.0%.
- The Asymmetric Corridor was adjusted to +50/-450 basis points around the MPR, a move aimed at tightening control over short-term interest rate fluctuations.
CBN Governor Olayemi Cardoso noted that maintaining the restrictive stance was necessary to consolidate ongoing gains in the foreign exchange market.
He explained that the current policy environment is designed to attract foreign inflows, improve market transparency, and support the broader economic reform agenda.
What you should know
The Standard Bank has projected that the Naira will close at N1,458.8/$1 by December 2025 amid improved foreign exchange (FX) reserves, buoyant banking system liquidity, and growing investor confidence in naira assets.
According to the bank, the currency has appreciated against the US dollar to below N1,500 since September 15, reflecting the CBN’s sustained efforts to stabilize the market.
In its September projection, the bank stated it expects the naira to close 2025 at N1,585.5/$1, down from its earlier forecast of N1,697.5/$1.
The bank stated that political developments and fiscal spending ahead of the 2027 general elections could exert pressure on the naira.
In December 2024, President Bola Tinubu, during his budget presentation speech, said the 2025 budget was based on the projections that inflation will decline from the current rate of 34.6 per cent to 15 per cent, while the exchange rate will improve from approximately 1,700 naira per US dollar to 1,500 naira.
