The naira maintained its position within the N1,600–N1,605/$ band against the global reserve currency, even as the dollar index climbed from a three-year low.
Despite the recent weakness in the dollar index, which dropped to a three-year low earlier, the naira’s value has remained relatively stable over the past week.
However, the local currency continues to face mild pressure due to ongoing global risks, including trade conflicts, declining oil prices, and mounting concerns about Nigeria’s deteriorating trade balance.
The Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso, pledged that the bank would remain transparent in its future actions. He stated, “There will, however, be a need to shift public perception by restoring confidence in the system through adjustments to our monetary policy framework.”
Speaking at an investment forum in New York, Cardoso added, “Confidence was something we didn’t have—and we’re focusing on the actions we take. We have no intention of reversing our course.”
Cardoso also highlighted that the recent upgrade in Fitch Ratings will help shift Nigeria’s long-term foreign-currency issuer default rating (IDR) from negative to stable. This change is expected to enhance the country’s prospects for attracting foreign investment and securing more favorable loan conditions in international markets, thereby boosting investor confidence.
The dollar regained some momentum mid-week following comments by U.S. Treasury Secretary Scott Bessent, who, in a private meeting, expressed optimism about the potential de-escalation of the U.S.–China trade war.
Bessent noted that neither country desires to prolong the conflict while pursuing economic recovery. His remarks suggested that the Trump administration did not intend to decouple the two economies.
President Donald Trump stated that he had “no intention” of firing Federal Reserve Chairman Jerome Powell before the end of his term next year.
When asked in the Oval Office why he wouldn’t dismiss Powell, Trump responded, “None whatsoever. Never did.” This marked a notable change in tone from Trump, who had recently been critical of Powell and had previously refused to rule out his removal.
Trump has pressured the Fed to cut interest rates in an effort to stimulate economic growth. Just last week, he remarked, “If I want him out of there, he’ll be out real fast.”
Temporary deleveraging pressures—rather than a fundamental rejection of Treasuries—have supported a resurgence in risk appetite. Nevertheless, the foreign sell-off of U.S. dollar assets has added to overall market volatility.
In the event of an economic downturn—an outcome we anticipate given the global slowdown—we expect the U.S. dollar to regain strength due to its size, stability, and liquidity.