By Iyobhebhe Gift Osareme( IT Student, Ambrose Ali University)
The naira showed improvement against the US dollar, rising to N1,609 from N1,615.94, marking a 0.37% increase. The Central Bank of Nigeria’s recent foreign exchange guidelines likely influenced this positive change.
The Monetary Policy Committee raised the benchmark interest rate to 22.75% from 18.75% in July 2023. Additionally, adjustments were made to the asymmetric corridor around the MPR, raising the Cash Reserve Ratio to 45.0%, and maintaining the Liquidity Ratio at 30%.
Despite the rate hike’s expected impact, the naira depreciated by 2.04% against the dollar, reaching N1,615.94 on Tuesday compared to N1,582.94 on Monday at the Nigerian Autonomous Foreign Exchange Market, according to FMDQ securities exchange data.
While government officials assert the naira’s undervaluation, FMDQ data indicates a drop in its value against the dollar, with varying rates reported by currency operators throughout the day.
Challenges such as security raids and delays in CBN’s promised dollar allocations to BDCs have hindered trading activities.
The CBN had announced the sale of $20,000 to each BDC at a rate of N1,301/$, allowing them to sell to end-users with a margin not exceeding one percent above the purchase rate from the CBN.
However, as of Wednesday night, BDCs had not received their allocations, despite over 1300 BDCs listed for allocation.
