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The Naira strengthened against the US dollar on Tuesday across both official and parallel foreign exchange markets, following the Central Bank of Nigeria’s (CBN) decision to cut interest rates by 50 basis points to 27 per cent—the first such move since 2020.
Official data from the CBN showed the Naira closing at N1,487.37 per dollar, compared to N1,488.60 on Monday, reflecting a daily gain of N1.23. In the parallel market, the currency also appreciated, rising by N2 to N1,520 per dollar from N1,522 the previous day. This comes after the Naira had slipped slightly at the start of the week.
Analysts suggest the CBN’s surprise rate cut may have buoyed confidence in the money market. Governor Olayemi Cardoso explained that the Monetary Policy Committee’s decision was informed by evidence of improved macroeconomic stability, a sustained disinflation trend, steady output growth, a more stable exchange rate, and stronger external reserves.
“The MPC expressed satisfaction with the prevailing macroeconomic stability evidenced by the improvements in several indicators.
“These include the sustained disinflation, improved output growth, stable exchange rate, and robust external reserves.”
The development comes as Nigeria’s external reserves continue to climb, reaching $42.13 billion on September 22, 2025, compared to $42.03 billion recorded the previous day.
