By Ada Samson , Abuja
A surprise interest rate cut by the Central Bank of Nigeria (CBN) has triggered positive movements for the national currency and the country’s key oil exports.
The CBN’s decision on Tuesday to lower its benchmark Monetary Policy Rate (MPR) by 50 basis points to 27 per cent, the first reduction in five years, was immediately followed by the naira appreciating in the official market and global oil prices extending their gains.
The naira strengthened against the US dollar at the Nigerian Foreign Exchange Market (NFEM), closing at ₦1,487.36 compared to ₦1,488.60 on Monday. This marginal gain of 0.08 per cent is seen as an early sign of investor confidence in the CBN’s strategic pivot towards stimulating economic growth. In the parallel market, the local currency held steady at ₦1,515 per dollar, indicating a period of relative stability.
Simultaneously, oil prices climbed for a second consecutive day. Brent crude futures rose by 0.3 per cent to $67.82 a barrel. While this was partly driven by global factors, including supply disruptions from Iraq’s Kurdistan region and a drawdown in US crude inventories, the CBN’s growth-oriented policy added a layer of optimism specific to Nigeria’s economic outlook. The bank’s governor, Olayemi Cardoso, underscored this positive trend by revealing that Nigeria’s crude oil production has risen to a four-year high of 1.68 million barrels per day in the second quarter of 2025.
The rate cut marks a cautious but clear shift in the CBN’s strategy after a prolonged period of monetary tightening aimed at curbing inflation. With inflation now showing consistent signs of easing, the apex bank has chosen to support economic expansion. “The CBN’s cautious decision to reduce its benchmark interest rate is part of efforts to stimulate economic growth,” the announcement confirmed. This move signals to markets that the bank is growing more confident in the stability of the economy.
Analysts point to sustained interventions by the CBN and steady foreign portfolio inflows as key drivers behind the naira’s recent positive momentum. In the previous week, the naira had already appreciated by 0.91 per cent week-on-week at the official window. The latest rate cut appears to have reinforced this trend, suggesting that international investors view the policy shift as a credible step towards improving the business environment.
While global uncertainties, particularly around US Federal Reserve interest rate decisions, continue to cap larger gains, the domestic reaction to the CBN’s move has been decidedly positive. The concurrent appreciation of the naira and rise in oil prices, a crucial source of government revenue, offers a hopeful sign that the new policy direction may successfully balance the dual objectives of stabilizing the currency and fostering much-needed economic growth.
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