Economists are divided on the sustainability of the Nigerian Naira’s recent stability, following a significant intervention by the Central Bank of Nigeria (CBN) that involved a $4.1 billion foreign exchange (forex) support in the first half of 2025. This intervention has kept the exchange rate within the range of N1,500 to N1,560 against the U.S. Dollar in recent weeks, though there are differing opinions on whether this level of stability is sustainable in the long term.

CBN’s $4.1 Billion Support

According to CSL Stockbrokers’ economic outlook, the CBN’s intervention involved direct dollar sales to eligible individuals and corporations. This was done to combat the prevailing issues of currency scarcity and to limit arbitrage. The intervention strategy has seen the exchange rate stabilize at N1,533 to a dollar as of the end of last week. On Friday alone, the CBN sold $80 million to eligible buyers, keeping the exchange rate within the N1,520 to N1,533 range for the week.

Since the Naira was floated, its exchange rate once soared above N2,000 to the dollar. However, following the CBN’s robust market participation, the worst seems to be over for the Naira. The intervention is expected to continue, with experts cautiously optimistic about its immediate impact, though concerns linger about the sustainability of these efforts.

Bismark Rewane’s Optimism

Renowned economist Bismark Rewane, in a TV interview, asserted that the Naira has stabilised and that the Nigerian economy is on a path to recovery. “The currency is strengthened because of the discipline in the monetary policy framework, inflation targeting, and a transparent foreign exchange market,” he said. Rewane further noted, “If we didn’t have that, Nigeria’s inflation data would be frightening.”

Rewane also predicted that the CBN’s Monetary Policy Committee (MPC) could consider reducing the interest rate by 25 basis points in its upcoming meeting. His optimism is bolstered by recent inflation data from the National Bureau of Statistics, which reported a slight decline in headline inflation to 22.22% in June 2025, down from 22.97% in May 2025.

Fragile Stability

However, some economists caution that the Naira’s stability is fragile. Ayokunle Olubunmi, a financial analyst at Augusto & Co., remarked, “The stability is still fragile. If there is a significant outflow of foreign portfolio investments or if global oil prices dip again, it could destabilize the currency.” Olubunmi acknowledged the CBN’s commendable efforts but warned that external shocks could reverse the gains.

Emeritus Professor Ndubisi Nwokoma also expressed concern, stating that true economic stability cannot be achieved without consistency in Nigeria’s key sectors of agriculture, manufacturing, and services. He highlighted that the CBN’s interventions are temporary fixes, often used to address imbalances in the foreign exchange market. Nwokoma added, “Stability is not sustainable unless there is a focus on increasing exports and diversifying sources of foreign exchange.”

MPC’s Next Move

The Monetary Policy Committee’s upcoming meeting will be crucial in determining the next steps in Nigeria’s monetary policy. Dr. Paul Alaje, a senior partner at SPM Professionals, noted that the MPC has two options: either to hold rates steady or take the risk of reducing the Monetary Policy Rate (MPR). A rate cut could spur economic growth but might also lead to inflationary pressures, making the decision highly sensitive.

Cautious Optimism

Despite the differing opinions, many agree that the CBN’s interventions have brought temporary relief to the currency market. Prof. Ken Ife, the Chief Economic Strategist at ECOWAS, shared a similar sentiment: “Slowing inflation and foreign exchange stability are encouraging signs, but global headwinds remain. Given these risks, the best option for the MPC is to hold rates steady.”

As Nigeria’s economic outlook continues to evolve, attention will remain on the CBN’s role in stabilising the Naira and steering the country toward a more sustainable growth trajectory. The global economic environment, particularly oil prices, remains a key variable in shaping the future of the nation’s monetary policy.