The naira appreciated to N1,625/$1 in the parallel market on Tuesday, up slightly from N1,627/$1 recorded on Monday, according to data sourced by Nairametrics from currency traders in Lagos.
This marks the second consecutive day of gains for the naira in the parallel market this week.
The naira closed at N 1,588.50/$1 on Tuesday, according to data on the Central Bank of Nigeria (CBN) website.
On Monday, Nairametrics reported that the naira appreciated marginally to N1,597/$1 at the official market, ahead of the highly anticipated 300th Monetary Policy Committee (MPC) meeting.
Intra-day trading revealed persistent volatility, with the currency fluctuating between a high of N1,601.5/$1 and a low of N1,580/$1.
FX volatility falls below 0.5%, says CBN Governor
Speaking at a press briefing in Abuja on Tuesday following the MPC meeting, CBN Governor Olayemi Cardoso announced a significant decline in foreign exchange (FX) volatility, which has now dropped below 0.5%, down from over 4% a year ago.
Cardoso attributed the improved stability to Nigeria’s ongoing monetary and fiscal reforms, which he said are gradually restoring macroeconomic confidence.
“If you look at the exchange rate, volatility has reduced from over 4% a year ago to less than half of 1% now. That’s an indication of stability,” he stated.
According to Cardoso, the improvement is the result of a consistent policy approach, orthodox monetary tightening, and enhanced transparency in CBN operations. He highlighted that early policy measures—such as liberalising the FX market, unifying exchange rates, and boosting FX supply through market-driven reforms—are beginning to yield measurable results.
Nigeria’s external reserves experience a “quantum leap”
Cardoso also disclosed that Nigeria’s net external reserves have surged from just over $3 billion to approximately $23 billion, a significant jump he described as a “quantum leap.”
This increase, he noted, is due to renewed investor confidence, greater transparency in reserve reporting, and the return of previously sidelined market participants. The CBN has resumed the regular publication of both gross and net reserves in a bid to foster market confidence and reduce speculative trading.
Gross reserves, which hovered around $33–34 billion in early 2024, are projected to rise further, bolstered by stronger oil receipts, reduced demand for fuel imports, and growing interest in Nigeria’s non-oil exports, especially natural gas.
MPC retains all key policy rates
At its milestone 300th meeting, the MPC unanimously voted to retain all key monetary policy parameters:
- Monetary Policy Rate (MPR): Maintained at 27.5%
- Asymmetric Corridor: Held at +500/-100 basis points around the MPR
- Cash Reserve Ratio (CRR): Retained at 50% for Deposit Money Banks and 16% for Merchant Banks
- Liquidity Ratio: Left unchanged at 30%
All 12 MPC members voted in favor of maintaining the existing policy rates, according to the CBN.
