The naira fell to ₦1,555/$ on the parallel market ahead of CBN’s July 21 MPC meeting.
Analysts expect cautious decisions as inflation cools slightly and FX pressures remain persistent.
The Nigerian naira weakened further on the parallel market Wednesday, sliding to ₦1,555 per dollar just days before the Central Bank of Nigeria (CBN) convenes its 301st Monetary Policy Committee (MPC) meeting.
A market survey conducted in Lagos revealed that the currency had depreciated from ₦ 1,550 to $1 earlier in the week, signaling continued pressure on the local unit despite recent central bank interventions.
Meanwhile, in the official Nigerian Autonomous Foreign Exchange Market (NAFEX), data from the CBN shows that the naira appreciated slightly to ₦1,528.65/$1 on Monday, up from ₦1,532 in the previous trading session. However, the market remained volatile, with intra-day fluctuations ranging between ₦1,515 and ₦1,532.
The MPC is scheduled to meet on July 21 and 22, 2025, with markets keenly awaiting the outcome. Economists and analysts expect the central bank to adopt a cautious yet firm policy direction as it attempts to manage inflation, maintain exchange rate stability, and support fragile economic growth.
The last MPC meeting in May concluded with a decision to maintain the Monetary Policy Rate (MPR) at 27.5%, reflecting the CBN’s conservative approach amid persistent economic uncertainty. Other key policy tools also remained stable:
- Asymmetric Corridor: +500/-100 basis points around the MPR
- Cash Reserve Ratio (CRR): 50% for Deposit Money Banks; 16% for Merchant Banks
- Liquidity Ratio: Held at 30%
The committee’s unanimous vote in May emphasized a “wait-and-see” approach, opting to assess the impact of recent monetary tightening before introducing further measures.
As the nation awaits the June 2025 inflation figures from the National Bureau of Statistics (NBS), analysts project a slight decline in headline inflation from May’s 22.97%. Most forecasts range between 22.0% and 22.8%, citing a combination of stable foreign exchange rates, seasonal food supplies, and reduced consumer demand.
Ebo Ayodeji, Managing Director at Optimus by Afrinvest, attributed the projected decline to subdued volatility in the energy market and relative stability of the naira. However, he flagged rising food prices due to insecurity in central farming states, such as Benue.
Olaitan Sunday, who heads Rostrum Investment & Securities Ltd, echoed similar expectations, pegging inflation between 22.4% and 22.8%. He pointed to recent FX gains, early harvests, and dampened spending habits as driving forces behind the easing trend.
Offering a more optimistic view, Onche Samuel, a senior banking executive, anticipates that inflation could drop to as low as 22.0%. He credited tighter monetary conditions, steady Treasury yields, and improvements in core inflation components, such as pharmaceuticals and logistics.
The CBN 301st MPC meeting will offer critical insights into Nigeria’s monetary direction for the second half of 2025. Key decisions on interest rates and liquidity management could influence investor confidence, borrowing costs, and exchange rate movements in the coming months.
