The naira, week on week, posted some recovery against the Dollar at the parallel market as the Central Bank of Nigeria set in motion its first Monetary Policy Committee (MPC) meeting under Yemi Cardoso.
The naira initially traded around N1600 to the USDT early Monday posting a weekly gain of more than 25 per cent for the week, although this has moved above the N1600 mark as at the time of this report.
However, the official Nigerian Autonomous Foreign Exchange (NAFEM) gained closing yesterday at N1,582.94 signifying an N82.56 gain compared to N1,665.5 it closed on Friday.
The parallel market after taking substantial gains following the arrests last week of parallel market operators, from a record low of last Wednesday of N1,920 to N1600 over the weekend declined again to N1,680/$1 yesterday.
However, the daily turnover recorded yesterday was$154.16 million, a 1.47 per cent increase from $151.93 recorded on Friday.
Also, the highest spot rate yesterday was pegged at N1778, while the lowest spot rate recorded was N1,300.
Many analysts are expecting a significant increase in the benchmark interest rate, also known as the monetary policy rate.
Following a few missed monetary policy sessions, Nigeria is expected to implement two aggressive interest rate hikes in less than two months to control inflation and strengthen the naira, according to a Reuters poll released on Friday.
Nigeria’s monetary policy rate is expected to increase by 225 basis points to 21.00 per cent on February 27 during Governor Olayemi Cardoso’s first monetary policy meeting, according to a survey conducted last week.
With the local currency still trading near its record low on the black market and January inflation increasing to 29.9 percent year over year, market pundits anticipate considerable policy tightening and the announcement of de facto system-wide tightening measures.
Throughout last week, the naira experienced a significant decline in value, hitting a low of N1,880 to the dollar on Thursday.
This depreciation has widened the disparity between the unofficial market rate and the official rate of the naira, presenting challenges to the government’s goal of unifying the two rates.
