The naira continued its downward trajectory this week, trading at N1,555 per dollar on the parallel market as of Wednesday, according to a market survey conducted by Nairametrics in Lagos.
This marks a further depreciation from the N1,550/$1 level recorded on Monday and Tuesday in the black market, underscoring persistent pressure on the local currency despite recent policy efforts to stabilize the exchange rate.
On the official market, the naira closed at N1,528.65/$1 on Monday, representing a slight appreciation from N1,532/$1 reported in the previous session, based on data from the Central Bank of Nigeria (CBN). As of midday Wednesday (12:14 p.m.), closing data for Tuesday had not yet been published on the CBN’s official website.
In intra-day trading on Monday, the naira saw significant volatility, swinging between a high of N1,532/$1 and a low of N1,515/$1, highlighting the fragile state of Nigeria’s FX market.
Market eyes pivotal MPC meeting
Investor attention has now turned to the CBN’s 301st Monetary Policy Committee (MPC) meeting, scheduled for July 21–22, 2025, in Abuja. Analysts anticipate a cautious yet decisive policy response amid ongoing currency weakness and high inflation.
The MPC’s decision on interest rates is crucial, as it influences borrowing costs, capital inflows, and the broader economic outlook. Market participants are keenly watching whether the committee will maintain its conservative stance or introduce further tightening to curb inflation and support the naira.
Inflation projections signal possible relief
Meanwhile, the National Bureau of Statistics (NBS) has yet to release official data on June 2025 inflation. However, early projections from economists suggest a slight decline in headline inflation from May’s figure of 22.97%.
Analysts from Optimus by Afrinvest, led by Managing Director Ebo Ayodeji, anticipate June inflation will ease, citing relative FX stability and subdued energy prices.
“We anticipate a further decline in headline inflation in June 2025, largely due to continued FX stability and minimal volatility in energy prices,” Ayodeji told Nairametrics. “However, food inflation remains a concern, especially due to insecurity in agricultural hubs like Benue State.”
Olaitan Sunday, Managing Director at Rostrum Investment & Securities Ltd, forecasts inflation to moderate to between 22.4% and 22.8%, attributing the decline to seasonal food supply adjustments and partial FX gains.
“Although structural challenges persist, including security issues and high logistics costs, we believe the combined effects of seasonal harvests and reduced consumer spending will help soften headline inflation,” he explained.
Onche Samuel, an executive banker, offered a more optimistic view, predicting headline inflation could drop to around 22.0% in June. He credits this to tighter monetary policy and improvements in core inflation metrics.
“The CBN’s sustained tight monetary policy, reflected in high treasury yields and a slightly firmer naira at the NAFEM window, helped restrain core inflation, especially in sectors like pharmaceuticals and logistics,” Samuel said.
CBN’s policy approach so far
At its 300th MPC meeting in May 2025, the CBN opted to keep the Monetary Policy Rate (MPR) steady at 27.5%, signaling a wait-and-see approach to gauge the impact of earlier policy measures.
Other key decisions included:
- Asymmetric corridor: Retained at +500/-100 basis points around the MPR
- Cash Reserve Ratio (CRR): Held at 50% for deposit money banks and 16% for merchant banks
- Liquidity ratio: Maintained at 30%
The vote was unanimous among all 12 MPC members, highlighting the committee’s preference for policy stability amid economic uncertainty.
What this means for the economy
The naira’s continued slide and persistent inflationary pressures have heightened the stakes for the upcoming MPC meeting. A firm policy stance could help restore investor confidence and signal the CBN’s commitment to stabilizing the currency and controlling inflation.
However, analysts warn that structural issues — including security concerns in food-producing regions, import dependency, and supply chain disruptions — continue to pose significant risks to economic recovery.
As Nigeria’s financial markets await the next policy moves, both local businesses and international investors will be watching closely for clues on the future trajectory of Africa’s largest economy.
