Naira appreciates further across FX markets

Naira, Nigeria’s legal tender on Wednesday appreciated again over dollar across foreign exchange market, a day after the Central Bank of Nigeria (CBN) raised interest rate by 150 basis points.

After trading on Wednesday Naira closed at N418.00 per dollar, gaining 0.2 percent compared with N419.00 closed on Tuesday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

Naira also strengthened against the dollar at the parallel market as it closed at N607 per dollar, gaining N1.00 from N608 closed on the previous day.

Traders attributed the Naira appreciation to a modest demand for the dollar.

The CBN, after the two days the Monetary Policy Committee (MPC) meeting in Abuja increased the policy rate by +150bps to 13.0 from 11.5 percent since September 2020.

The latest rate hike was the first since July 2016 when the committee decided to raise rates by 200bps to 14 percent.

“Although we had expected the committee to hike rates given the acceleration of headline inflation in recent months, our expectation shared with local newswires was a token rate hike of 25bps to 50bps, analysts at FBNQuest said.

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The committee’s unanimous vote to hike interest rates signals a firm commitment to taming inflation, which has been soaring for three months.

Nigeria’s inflation rate jumped to 16.82 percent in April, the highest in eight months amid rising food and diesel prices.

At the money market on Wednesday, the Overnight (O/N) rate increased by 1.00 percent to close at 13.50 percent as against the last close of 12.50 percent on Tuesday.

Similarly, the Open Repo (OPR) rate increased by 0.63 percent to close at 12.96 percent compared to 12.33 percent on the previous day.

The Nigerian treasury bills secondary market closed on a flat note with the average yield across the curve remaining unchanged at 3.87 percent, a report by FSDH research noted.

Average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.02 percent, 3.36 percent, and 4.69 percent, respectively.

At the Primary Market Auction held Wednesday, the CBN offered NT-bills maturities worth N153.02 billion across 91-day (N5.36 billion), 182-day (N3.78 billion), and 364-day (N143.88 billion) tenors.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.