Naira Extends Rally, Hits N1,484/$ Against U.S. Dollar

The Nigerian naira extended its gains against the U.S. dollar ahead of a key interest rate decision expected from the United States Federal Reserve later today.

The U.S dollar plummeted to N1,484.13 on Tuesday in the Nigerian official foreign exchange (FX) market, which was N13 higher than the N1,497.5/$ quoted on Monday.

However, the naira traded at the N1520/$-N1530/$ band at the physical black market in Nigeria’s business capital at the mid-week trading session.

Nigerian Banks’ naira debit card dealing with FX transactions had also led to a drop in FX demand, providing Naira bulls with enough ammunition to hold below the N1,500/$ support line. The naira is experiencing a period of stability, one year after a precipitous decline against the dollar.

Naira bulls might gain some momentum in the mid-term amid projected moderation in Nigeria’s inflation readings.

Nigeria’s inflation rate decreased for the fifth consecutive month, providing respite to consumers burdened by consistently high living expenses.

NBS data revealed that Nigeria’s inflation rate dropped to 20.12% in August.

The average change in prices of goods and services is measured by the Consumer Price Index (CPI), which rose slightly from 125.9 points in July to 126.8 points in August.

According to the NBS report, month-over-month inflation was 0.74%, significantly lower than the 1.99% recorded in July, indicating that price increases are slowing across Nigeria

“Compared to the headline inflation rate of 21.88 per cent in July 2025, the headline inflation rate dropped to 20.12 per cent in August 2025,” the agency said.

The main driver of inflation in Nigeria, food inflation, also decreased in August but stayed high. The index fell from 37.52 per cent in August 2024 to 21.87 per cent year over year. Food inflation decreased to 1.65 per cent monthly from 3.12 per cent in July.