Naira has recorded the first fall since the Central Bank of Nigeria (CBN) raised its benchmark interest rate, known as the Monetary Policy Rate (MPR).
After trading on Tuesday, naira depreciated by 4.26 percent as the dollar was quoted at N1,602.43, weaker than N1,534.19 quoted on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data released by the FMDQ Securities exchange.
This is despite an increase in dollar sales by banks and other market participants during the foreign exchange (FX) trading on Tuesday.
The daily FX market turnover rose by 63.34 percent to $291.78 million on Tuesday from $178.63 million recorded on Monday.
Intraday high depreciated to N1,652.40 on Tuesday, weaker than N1,600.75 quoted on Monday on the spot. Also, intraday low weakened to N1,450, weaker than N1,425.35 quoted on Monday.
At the parallel market, also known as black market, naira fell by 3.07 percent as the dollar was quoted at N1,630 on Tuesday as against N1,580 quoted on Friday.
The renewed pressure on the forex market was attributed to increased demand for dollars by individuals who want to travel for business, tourism, health and education.
The Monetary Policy Committee (MPC) meeting, which held on Monday and Tuesday last week, raised the MPR by 400 basis points to 22.75 from 18.75 per cent., adjusted the asymmetric corridor around the MPR to +100/-700 from +100/-300 basis points, raised the Cash Reserve Ratio from 32.5 per cent to 45.0 per cent, and retain the Liquidity Ratio at 30 per cent.
Kingsley Moghalu, former deputy governor of the CBN and Chairman, advisory board and board of directors, Africa Private Sector Summit (APSS), has advised the CBN to continue its recently announced monetary policy stance of tightening the money supply for the next 24 months at least until inflation is brought under firm control in the single digits.
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