Naira Stays Stable After CBN Holds Rates
By Modupe Gbadeyanka
The Naira stayed relatively stable on Tuesday after the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) announced it was leaving the rates unchanged.
The local currency was exchange at N497 to the Dollar on the parallel market, while it was sold at N305.5 to the Dollar on the official market.
In line with analysts’ forecast, the MPC held the benchmark interest rate at 14 percent like it did at its last two previous meetings.
Commenting on the MPC decision, a Lagos-based Bureaux De Change (BDC) operator, Mr Martin Okonkwo, said it did not come as a surprise, adding that forex dealers did not expect the CBN to announce a policy that will significantly affect activities in the forex market.
He said: “Being its first meeting this year, the MPC was not expected to announce a major policy that will affect forex trading. From all indications the naira will continue to trade at current levels in the short to medium term.”
Also, in her comments, Head of Africa macro research at Standard Chartered Plc, Mr Razia Khan, said: “For now, the only clear takeaway is that there are no imminent plans for further FX liberalisation. FX will continue to be rationed.”
For the first two weeks of this year, the Naira struggled on the parallel market, falling to nearly N500/$, owing to acute forex shortage as the CBN and the major international money transfer organisation, Travelex, did not sell dollars to BDCs.
As part of efforts to close the wide gap between the naira’s exchange rate on the official and the parallel markets, the Association of Bureau De Change Operators of Nigeria (ABCON), last week launched a portal that will publish a reference forex rate for members of the association every Monday.
ABCON President, Mr Aminu Gwadabe, appealed to Nigerians with legitimate needs for foreign exchange to visit any CBN registered BDC to purchase dollars with relevant documents at N399 to the dollar, being the reference rate for last week.