Experts Predict Sustained Naira Stability as Speculation in FX Market Declines
Story written by Okafor Joseph September 16,2025
The naira is projected to maintain stability in the medium term, with reduced speculative activity and stronger investor confidence helping to anchor the foreign exchange market, according to members of the Monetary Policy Committee (MPC) following their July 2025 meeting.
At the Nigerian Foreign Exchange Market (NFEM), the local currency gained ground against the US dollar last week, appreciating by 0.98% to N1,501.50/$. The parallel market also improved slightly, closing at N1,535.00/$, leaving the official rate at a 2.23% premium compared to the street market.
Bala Moh’d Bello, an MPC member, noted that the naira’s steadiness reflects tighter liquidity conditions, improved investor sentiment, and reforms in foreign exchange management. He added that speculation in the market has dropped sharply, making room for more transparent price discovery. Nigeria’s external reserves climbed to $40.11 billion as of July 18, 2025, providing about 9.5 months of import cover.
Similarly, Aloysius Uche Ordu highlighted that narrowing gaps between the official and parallel market rates signal improved liquidity, driven by strong remittances and portfolio inflows.
Bandele A. G. Amoo observed that the country’s balance of payments remains stable, with crude oil output improvements and reduced demand for petroleum imports strengthening reserves. He stressed that the reforms have created a more resilient FX system, with the naira showing consistent gains in the official market.
Deputy CBN Governor Emem Usoro emphasized that reforms and rising reserves are boosting investor confidence, enhancing transparency, and helping to curb inflationary pressures by limiting exchange rate pass-through effects.
Other MPC members, including Lamido Abubakar Yuguda and Mustapha Akinkunmi, praised the success of diaspora inflows and robust external buffers, while CBN Governor Olayemi Cardoso reaffirmed that coordinated reforms continue to stabilize the FX market, despite global uncertainties.
Overall, the MPC members agreed that Nigeria’s external reserves, stronger non-oil inflows, and ongoing policy reforms provide a solid foundation for the sustained stability of the naira in the coming months.
