Naira Stability and Economic Rebound: Expert Views on Nigeria's Economic Outlook

Strategic Insights -

The Central Bank of Nigeria (CBN) has made significant interventions in the foreign exchange market to stabilize the naira, with the exchange rate ranging between N1,520 and N1,533 to a dollar. Economists, including Bismark Rewane, have hailed the efforts, with Rewane asserting that the naira has stabilized and the economy is beginning to rebound. However, others caution that the stability is fragile and can be affected by factors such as global headwinds, oil prices, and the departure of foreign portfolio investors.

Key Takeaways:

  • The CBN has intervened in the foreign exchange market to the tune of $4.1 billion in the first half of 2025 to check arbitrage, scarcity, and keep the exchange rate low.
  • The exchange rate has stabilized between N1,520 and N1,533 to a dollar, with $80 million sold to eligible buyers during the week.
  • Economists, including Rewane, believe that the naira has stabilized, while others, such as Ayokunle Olubunmi, caution that the stability is fragile and can be affected by external factors.
  • The Monetary Policy Committee (MPC) is meeting this week, with expectations of a possible cut in the interest rate by 25 basis points.
  • The MPC has two options: to leave rates static or take a risk by reducing the Monetary Policy Rate (MPR).
  • Experts, including Prof. Ken Ife, warn that global headwinds, such as oil prices powering below the budget benchmark, pose risks to the economy.

Statistics:

  • The CBN has sold over $4 billion to eligible buyers between January and June 2025.
  • The exchange rate has fluctuated between N1,520 and N1,533 to a dollar.
  • Inflation has eased to 22.22 percent, with a marginal decrease of 0.76 percent from May 2025.
  • The Consumer Price Index (CPI) rose to 123.4 in June 2025, reflecting a 2.0-point increase from the preceding month (121.4).
  • Food inflation rate has decreased to 21.97 percent on a year-on-year basis, compared to 40.87 percent in June 2024.

Sources:

  • Rewane, B. (Speech last week during a TV interview)
  • Central Bank of Nigeria (CBN)
  • Daily Trust
  • CSL Stockbrokers (Half year economic outlook report)
  • Nigeria Foreign Exchange Market (NFEM)
  • Monetary Policy Committee (MPC)
  • National Bureau of Statistics (NBS)
  • Augusto and Co
  • SPM Professionals
  • Economic Community of West African States (ECOWAS)