Experts Predict New Naira to Dollar Exchange Rate After CBN Lowers MPR
- Bismarck Rewane said the naira could depreciate after the CBN cut the MPR by 350 basis points to 23%
- Rewane estimated the naira’s fair value at N1,150/$, compared with N1,327.78/$ at NAFEM
- AIICO Capital expects the naira to remain around N1,330/$ at the official market
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks and broader financial trends.
The naira may depreciate following the Central Bank of Nigeria’s (CBN) 350-basis-point cut in its Monetary Policy Rate (MPR) to 23%, according to Bismarck Rewane, Managing Director of Financial Derivatives Company.
Rewane said the lower interest rate could reduce returns on naira assets and put pressure on the currency.
Source: Getty Images
He said:
“So it’s a jumbo cut from 26.5% to 23%, 350 basis points is huge by any stretch of imagination. So that’s a big risk."
Rewane gives naira fair value
Rewane said the naira could depreciate following the rate cut but added that the decline may not be significant.
He estimated the currency’s fair value at about N1,150/$, stressing that the figure was a fair-value estimate rather than a specific prediction of where the naira would trade.
The naira closed at N1,327.78/$ at NAFEM on Tuesday, September 22, compared with N1,329.80/$ on Monday.
In the parallel market, the naira strengthened to N1,380/$ from N1,385/$.
The currency also closed at N1,774.31/£1 and N1,521.37/€1 at NAFEM. In the parallel market, the pound traded at N1,865/£1, while the euro stood at N1,565/€1.
AIICO expects naira to hold around N1,330/$
AIICO Capital said the naira could remain around N1,330/$ at the official market despite the reduction in interest rates.
The investment firm said foreign reserves of about $55 billion, up from $45.50 billion at the start of the year, could give the CBN room to manage possible outflows.
AIICO analysts said:
“The rate cut narrows the return on naira assets, but reserves of about $55 billion, up a fifth since January, give the central bank room to smooth any outflows."
Source: Getty Images
Lower rates could affect savings
Rewane said the rate cut could reduce returns for savers and encourage investors to consider alternative assets.
He said the real rate of return had fallen from 11.1% to 7.61%, although it remained attractive for carry trades.
The economist said:
“The danger is that you may then begin to start to buy alternative assets. Which includes dollars, Bitcoin, we don’t know."
Rewane added that diaspora inflows could partly replace weaker foreign portfolio investment.
Naira gets new exchange rate as FX supply rose to $8.94bn
Earlier, Legit.ng reported that Nigeria's foreign exchange supply grew by 20.5% to $8.94 billion in 2025, up from $7.43 billion recorded in 2024.
The increase means the country supplied roughly $1.51 billion more in foreign currency during 2025 than it did the previous year.
Monthly data from the CBN bulletin showed significant swings in supply across the year.
Source: Legit.ng
