Following the Central Bank of Nigeria’s decision to raise the monetary policy rate (MPR) by 25 basis points to 27.50 percent in an effort to combat inflation, the naira held steady in the foreign exchange (FX) market on Wednesday.
The official market closed with the exchange rate at N1,660.83/$, showing a slight depreciation of 0.08 percent from the previous day. Meanwhile, the parallel market saw the naira at N1,750/$.
Despite the increase in interest rates, the value of the naira remained relatively stable due to lower demand and liquidity in the market, with a 20.9 percent decrease in daily FX market turnover.
Data from FMDQ Securities Exchange Limited revealed that the naira appreciated by 0.98 percent on Tuesday and has depreciated by 40.4 percent year-to-date.
Bismarck Rewane, CEO of Financial Derivatives Company, noted that the naira has depreciated by 36.50 percent year-on-year. Analysts remain hopeful for potential currency appreciation in 2025.
