BUSINESS
Naira gains further against dollar
The Naira on Wednesday strengthened further to close at 364 per US Dollar against a rebounded rate of 365 on Tuesday at the parallel market. However, dropped to 425 to a Euro compared to 420 that been trading in the last two weeks.
The local currency gains in the foreign exchange market (forex) yesterday, following decision of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to hold key interest rate at 14 percent for 12 months running.
Also, boosting liquidity in various segments of the forex market by the apex bank with the total sum of $195 million ahead of the decisions of the MPC has lifted the Naira at the official segment to 305.70 per dollar on Wednesday against the 305.75 traded the previous day, appreciated by 0.02 per cent.
However, the naira, at the parallel market against the other major foreign currency, Pound sterling retained at a depreciated rate of 474 to against 470 traded over the weekend at the parallel market.
At the Investors and Exporters FX window, the Naira opened at a more depreciated rate of 367.75 to the dollar compared to 367.21 opened on Tuesday, representing a decline of 0.15 per cent, but closed at a better rate of 368.60 while compared to 369.50 sold the previous day, representing an appreciative rate of 0.24 per cent.
The Investors and Exporters FX window, however, recorded a daily turnover of $182 million.
The CBN, at the end of its MPC meeting on Tuesday, retained the Monetary Policy Rate (MPR) at 14 per cent, Cash Reserve Ratios (CRR) for commercial banks at 22.5 per cent, the Liquidity Ratio (LR) at 30 per cent, Asymmetry corridor at +200 and -500 basis point.
The committee latest decision indicated that the benchmark lending rate that was retained at 14 per cent and all other parameters at their current levels for 12 months running. Governor, CBN, Mr. Godwin Emefiele, who announced the conclusion of the committee noted that their decision is based on the need to halt the inflation rate while also controlling growth.
According to him, the MPC sees the slow implementation of the 2017 budget as a challenge, calling on the fiscal authorities to speed up the process in line with the Economic Recovery and Growth Plan (ERGP).
He said, “The inflation rate is at 16.10 per cent as at June, which was 0.15 per cent points lower than the rate recorded in May. This represented the fifth straight decline in the rate of inflation since January 2017. These are indications that the economy is showing strong signs of recovery.”
Considering high inflation rate currently at 16.1 percent in June, coupled with the continuous effort by the apex bank in mopping up liquidity from the system through incessant sales of Treasury bills and other market securities, financial analysts, had predicted that the MPC would keep rate at current levels.
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