Naira appreciates as Nigerian billionaire predicts new dollar exchange rate by December
The naira strengthened slightly on Wednesday, September 24, closing at N1,488.56 per US dollar at the Nigerian Foreign Exchange Market (NFEM), compared with N1,488.92 recorded the previous day. The local currency also gained against other majors, reflecting a cautious improvement in sentiment amid ongoing policy support.
Key market moves
- Official market: N1,488.56/$1 (from N1,488.92/$1)
- Pound sterling: N2,001.08/£1 (from N2,011.37/£1)
- Euro: N1,747.28/€1 (from N1,754.35/€1)
- Parallel market: around N1,505/$1 (from N1,510/$1)
Traders linked the midweek appreciation to continued support from the Central Bank of Nigeria (CBN), which has maintained interventions to keep the exchange rate within an indicative band of N1,480–N1,550 per dollar.
Policy backdrop and reserves
At its 302nd Monetary Policy Committee meeting on Tuesday, the CBN reduced the benchmark interest rate by 50 basis points to 27.00% from 27.50%. This marks the first rate cut since 2020, following three consecutive pauses and a series of hikes earlier in 2024. Policymakers signaled a balance between curbing inflation and supporting growth, while maintaining vigilance on exchange rate stability.
CBN Governor Yemi Cardoso disclosed that Nigeria’s external reserves have risen significantly, reaching about $43 billion this month—the highest level in recent years. Stronger reserves can bolster market confidence by providing greater capacity for liquidity support in the foreign exchange market.
Analysts’ take
Market analysts expect the near-term impact of the rate cut on the currency to be contained, with limited volatility likely in the immediate period. They note the naira has largely traded within a relatively narrow range of N1,500–N1,600 per dollar in recent months, supported by consistent policy actions, improved reserve levels, and closer monitoring of foreign exchange flows.
Outlook and private-sector sentiment
Offering a more optimistic medium-term view, Abdul Samad Rabiu, Chairman of BUA Group, projected that the naira could strengthen to between N1,300 and N1,400 per US dollar by December 2025. He shared the outlook after a meeting at the State House in Abuja, describing the current foreign exchange framework as more transparent and supportive of economic stability and business growth.
While such projections signal growing private-sector confidence, the trajectory of the naira will hinge on several factors, including sustained FX supply, export receipts, oil production and prices, inflows from diaspora remittances and portfolio investments, as well as continued reform implementation. The CBN’s policy stance—balancing inflation management with exchange rate stability—will remain central to market dynamics.
Bottom line
The naira’s modest appreciation reflects a combination of policy support, firmer reserves, and steady market oversight. With interest rates trimmed and confidence indicators improving, attention turns to the consistency of reforms and the durability of FX inflows. Investors and businesses will watch for how these elements align with the optimistic forecasts for year-end and into 2025.
