Naira weakens to N1,535/$ at official market despite CBN’s interest rate hold

The Nigerian naira extended its downward slide against the U.S. dollar at the official foreign exchange market on Tuesday, July 22, 2025, even as the Central Bank of Nigeria (CBN) opted to retain the benchmark interest rate at 27.50 percent following its Monetary Policy Committee (MPC) meeting.

According to data published on the CBN’s official exchange rate portal, the naira depreciated to N1,535.24 per dollar, compared to N1,532.54 recorded on Monday, representing a day-on-day loss of N2.70.

This marks the second depreciation recorded in the official market this week, raising fresh concerns about the sustainability of the central bank’s recent monetary tightening stance and its effect on exchange rate stability.

In contrast, the naira remained unchanged at the parallel market, exchanging at N1,540 per dollar, mirroring Monday’s rate, according to market operators.

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The depreciation comes on the heels of the 301st MPC meeting, which ended with the apex bank holding the Monetary Policy Rate (MPR) steady at 27.50 percent.

The decision, according to CBN Governor Dr. Olayemi Cardoso, was aimed at consolidating recent gains in curbing inflation while sustaining efforts to stabilize the macroeconomic environment.

Despite the continued pressure on the local currency, Dr. Cardoso expressed optimism, stating that Nigerians now exhibit “greater confidence in the naira”, citing increased inflows into the formal foreign exchange market and signs of improved liquidity conditions in recent weeks.

However, currency analysts suggest that persistent volatility in the naira may continue in the short term, especially as structural reforms, foreign direct investments, and external reserve buffers remain under strain.

The CBN has, in recent months, deployed a series of policy tools—including multiple interest rate hikes, clearance of FX backlog, and tightening of monetary liquidity—in a bid to stabilize the naira and contain inflationary pressures.

While the central bank maintains that its strategies are beginning to yield results, Tuesday’s exchange rate figures underscore the fragile state of Nigeria’s foreign exchange dynamics and the challenges ahead in achieving a fully stable naira.