Members of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) have projected a further strengthening of the naira. They expect the currency to appreciate to about N1400 to the dollar before the end of 2025, riding on improved oil production, steady capital inflows, and disciplined liquidity management.
In their personal statements at the last MPC meeting, held in July, which were just released, they expressed optimism and confidence in the trajectory of the foreign exchange market.
A member of the MPC, Murtala Sabo Sagagi, noted that the combination of higher crude oil output, new capital inflows and improved balance of payments would sustain the naira’s momentum.
“With the recent increase in daily crude oil production, new inflows of capital and improved balance of payment, the naira is likely to keep appreciating to reach the projected N1400/$1 before the end of the year,” he stated.
Sagagi noted that the inflation moderation attained and the CBN’s doggedness in ensuring foreign exchange unification and disciplined liquidity management should be further harnessed to speed up growth and improve welfare.
Other members echoed confidence in the trajectory of the foreign exchange market. According to Lamido Yuguda, the progressive growth of both gross and net foreign exchange reserves rose to $40.11 billion in July, providing the much-needed external buffer to anchor exchange rate stability.
Also, CBN’s deputy governor, Bala Moh’d Bello, reinforced the view, stressing that speculative activities in the forex market have significantly declined. “The naira exchange rate has remained relatively stable, reflecting the benefits of tighter liquidity conditions, increased investor confidence, and the effective implementation of recent adjustments to the forex management framework.
“Speculative activities in the forex market have declined significantly, fostering greater transparency and promoting market-based price discovery. This stability is expected to persist over the medium term, supported by rising external reserves, which stood at $40.11 billion as of July 18, 2025, equivalent to approximately 9.5 months of import cover,” he stated.
Meanwhile, members restated the MPC’s resolve to keep interest rates elevated for longer, stressing that sustaining the current tight stance remains the surest way to consolidate gains in price and exchange rate stability.
The members had, at the last meeting, voted unanimously to retain the Monetary Policy Rate (MPR) at 27.5 per cent alongside other key parameters, citing persistent inflationary pressures and lingering global uncertainties.
CBN governor, Olayemi Cardoso, noted that the Committee’s decision was guided by the need to ‘protect recent gains in disinflation, exchange rate stability and improved investor confidence.’ He said that headline inflation has eased for three consecutive months to 22.22 per cent in June. Still, he warned that ‘core inflation remains sticky and underlying price pressures elevated, reflecting structural rigidities in food and energy supply.’
Similarly, Bello argued that Nigeria must “stay the course with a higher-for-longer posture” until inflation expectations are firmly anchored. He observed that while growth improved to 3.13 per cent in Q1 2025, the real danger lies in ‘premature easing that could reverse the fragile disinflation gains.’
Another committee member, Aloysius Ordu, noted that the tightening stance is essential to restoring credibility in the naira. “There is no such thing as double-digit stable inflation. Our tightening stance is warranted for as long as it takes until inflation expectations are well anchored,” he remarked, linking disinflation to deepening Nigeria’s domestic capital market.
