Naira Strengthens Against Euro as CBN Holds Interest Rate at 26.5% Amid Economic Reforms
The Nigerian Naira has recorded a notable gain against the Euro, strengthening by about 5.4% since the start of the year. The Euro now trades around ₦1,592.5, down from ₦1,684, reflecting a broader shift in Nigeria’s foreign exchange market as monetary and structural reforms begin to take effect.
This improvement comes as the Central Bank of Nigeria (CBN) maintains its benchmark interest rate at 26.5%, a policy stance aimed at controlling inflation and attracting foreign portfolio investment into Nigerian assets, particularly government debt. The decision signals the bank’s commitment to stability despite global economic uncertainties.
CBN Governor Olayemi Cardoso emphasized that the monetary policy committee is focused on a “cautious and vigilant” approach to anchor inflation expectations and protect macroeconomic stability. According to him, recent reforms have helped Nigeria better absorb external shocks, while reducing the impact of global price fluctuations on domestic inflation.
On the foreign exchange front, the CBN has continued its shift toward a “willing buyer, willing seller” system, helping clear FX backlogs and improving liquidity across official and parallel markets. Confidence has also been boosted by improved sovereign outlooks, including S&P Global Ratings upgrading Nigeria from ‘B-’ to ‘B’, citing stronger fiscal discipline and a more market-driven exchange rate system.
Meanwhile, structural developments such as increased local refining capacity—led by the Dangote Refinery—and support from institutions like the International Finance Corporation (IFC) are further strengthening Nigeria’s external position. Combined with global Euro weakness driven by geopolitical tensions, inflation concerns, and shifting European Central Bank expectations, the Naira’s recent gains reflect both domestic reforms and international market pressure on the Euro.
source: Nairametrics