Naira strengthens as CBN MPC meets

The naira appreciated against the dollar on Monday, coinciding with the 257th meeting of the monetary policy committee (MPC) of the Central Bank of Nigeria (CBN).

The naira had previously traded at N320.50 to a dollar and N415.20 and N369.05 to the pound and euro respectively.

At the parallel market, the Nigerian currency traded at N367 to the dollar while the pound and euro traded at N475 and 420 respectively.

The CBN had announced that it would hold its MPC meeting on Monday and Tuesday to discuss interest rate, cash reserve (CSR) and liquidity ratio.

At the previous meeting held, the MPC decided to maintain key interest rate at 14 percent, cash reserve ratio and liquidity ratio were held at 22.5 percent and 30 percent respectively.

“The MPC was of the view that whereas the downward trend in inflation is a welcome development, the rate was still significantly above the policy reference band,” Godwin Emefiele, CBN governor, had said.

“Committee is particularly with the gradual retreat in inflation, the relative stability in the naira exchange rate across all segments of the market and the improved prospect of foreign inflows.

“The monetary policy committee this is intended to allow the existing policies to achieve their goals and objectives.

“The committee was also concerned that loosening will exacerbate inflationary pressure and worsen the gains so far achieved in exchange rate of the naira. It was also convinced that loosening will further increase the negative interest rate.”

For five consecutive months, inflation has contracted to stand at 16.10 percent from 18.2 percent in January.