Monetary Policy: Forex rate crashes as Naira appreciates

Few hours after the CBN announced the outcome of its Monetary Policy Committee (MPC) meeting, the exchange rate crashed at the parallel market as the Naira further appreciated against the dollar.

The Nigerian currency gained two points to trade at N363 to the dollar on Tuesday at the parallel market in Lagos, stronger than N365 posted on Monday.

The Pound Sterling and the Euro closed at N475 and N420 respectively at the parallel market.

At the Bureau De Change (BDC) window, the Naira was sold at N362 to the dollar, while the Pound Sterling and the Euro exchanged at N477 and N419, respectively.

Trading at the investors’ window saw the Naira closing at N369.50, while it also closed at N305.75 at the interbank market.

Traders at the market attributed the further appreciation of the Naira to the outcome of the MPC meeting of the CBN.

Meanwhile, Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), said that the mop up of liquidity by the CBN was already impacting the exchange rate positively.

Gwadabe said that the commitments of the apex bank in driving its liquidity mop up in the economy had sent panic to the camps of currency speculators.

According to him, critical stakeholders in the financial market are, by the feat of the apex bank, witnessing a convergence in the prevailing rates between the parallel market and the BDCs.

The MPC rose from its meeting retaining the Monetary Policy Ratio (MPR) at 14 per cent alongside other monetary policy parameters.

The CBN pledged to intensify its intervention at the nation’s foreign exchange market until the Naira attained full recovery.

The apex bank added that it would continue its liquidity mop up in the overall interest of the economy.

Ime Njoku