MARKET NEWS

The naira on Tuesday appreciated to N1,487.36 per dollar in the official foreign exchange (FX) market, following the Central Bank of Nigeria’s (CBN) cautious decision to reduce its benchmark interest rate, the Monetary Policy Rate (MPR), as part of efforts to stimulate economic growth.

At the close of trading yesterday, the naira recorded a marginal gain of 0.08 per cent, with the dollar quoted at N1,487.36 compared to N1,488.60 on Monday at the Nigerian Foreign Exchange Market (NFEM), according to CBN data.

In the parallel market, also known as the black market, the local currency held steady at N1,515 per dollar, street traders confirmed on Tuesday.

Nigeria’s external reserves, which provide the apex bank with the firepower to defend the naira, climbed to $42.13 billion as of September 22, 2025.

In the banking segment, Access Bank on Tuesday reduced its FX rate for international payments to N1,515 from N1,529 on Monday, while BTBank’s rate remained unchanged at N1,505 per dollar.

The currency movement came on the back of the conclusion of the two-day Monetary Policy Committee (MPC) meeting in Abuja, attended by 12 members of the committee.

At the meeting, CBN Governor Olayemi Cardoso announced a 50 basis points reduction in the policy rate to 27 per cent from 27.50 per cent. He explained that the decision was taken to boost economic growth and sustain foreign portfolio investments into the country.

The naira had already sustained a positive momentum in the previous week, recording a modest appreciation against the US dollar at the official window, where it strengthened by 0.91 per cent week-on-week to close at N1,487.90 per dollar, representing a gain of N13.60. This performance was largely driven by sustained CBN interventions and steady foreign portfolio inflows, according to a report by Coronation Merchant Bank research.

In the parallel market, the naira also gained, appreciating by 0.66 per cent week-on-week to settle at N1,525 per dollar. Meanwhile, total FX inflows into the NAFEM window rose to $605.00 million, compared to $550.90 million the previous week. Foreign Portfolio Investments (FPIs) accounted for the largest share of inflows at $251.70 million, representing 41.60 per cent. Exporters contributed 19.72 per cent, non-bank corporates 13.33 per cent, Foreign Direct Investments (FDI) 8.94 per cent, the CBN 6.10 per cent, while other sources accounted for 10.32 per cent.

CBN data also revealed that gross external reserves recorded a marginal increase of 0.72 per cent, adding $229.67 million to close at $42.00 billion. Looking ahead, Coronation Merchant Bank noted that the naira is expected to trade within a relatively stable band in the coming week, with potential for mild appreciation if foreign portfolio inflows and liquidity support remain sustained.