The Naira again showed strength in the official currency market but remained week in the black market. Data from financial analysts FMDQ show the naira appreciated by about N16.18 and settled at N1,659.44/$ on Tuesday from N1,675.62/$ on Monday.
However it settled at N1,750/$ on Wednesday morning in the unofficial markets.
Following the conclusion of its final meeting in the year, the CBN’s Monetary Policy Committee (MPC) unanimously raised the money policy rate or interest rate by 25 basis points from 27.25% to 27.50% as forecasted by analysts in a previous publication from 9am News Nigeria. This implies that commercial banks within the country cannot lend money below this interest rate.
The committee also agreed to keep the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
CBN Governor Yemi Cardoso said the CBN will always prioritize the stability of the naira as it the most essential thing to do in order to secure a favorable business environment and economic stability.
“The Nigerian Central Bank exists to maintain stability. Stability facilitates economic planning. We make every effort to use all the resources at our disposal, which include several tools such as penalizing individuals who behave poorly, along with a variety of other measures to guarantee stability.” Yemi Cardoso stated.
The CBN governor claimed that the naira has remained stable since June 2024, despite pressures coming from from both domestic inflationary trends and international economic uncertainties. However the Naira’s stability has only in the official market where it is often difficult to get foreign exchange. At the unofficial market (black market, commonly referred to as the real market) the Naira has continued to slide driven by increasing forex demands.
Currency affairs at the international scene
Following US President-elect Donald Trump’s announcement that an additional 25% tarrif would be imposed on good imported from Mexico and Canada and a 70% tarrif on goods imported from China, many global currencies including the naira has seen disruptions at the currency markets.
The US Dollar Index, which is a figure used to compare the US dollar’s strength to a host of major currencies, hovered around 106/107 index points during trading sessions on Wednesday 27 November. This index indicate a very strong dollar. A strong dollar is never favorable to an ailing naira at the scene of global currency trade.
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