Currency trades within stable range as Central Bank maintains tight monetary stance to contain inflation and support market confidence…..
The Naira showed signs of stability against the United States Dollar on Thursday morning at the official foreign exchange market following the Central Bank of Nigeria’s decision to retain the country’s benchmark interest rate at 26.5 percent.
Early trading data from the Nigerian Foreign Exchange Market (NFEM) showed the local currency exchanging at 1,371.25 to the dollar, extending the relatively steady performance recorded in recent sessions.
The latest movement came shortly after the Central Bank’s Monetary Policy Committee concluded its 305th meeting held on May 19 and 20, where members unanimously agreed to leave all major monetary policy indicators unchanged.
The committee, chaired by CBN Governor Olayemi Cardoso, opted to retain the Monetary Policy Rate at 26.5 percent while also maintaining the Standing Facilities Corridor at +50 and -450 basis points around the benchmark rate.
The apex bank said the decision reflects its cautious approach toward tackling inflation and sustaining broader macroeconomic stability.
Market activity within the official FX window remained largely calm during the early hours of trading, with dealers reporting healthy liquidity levels and steady interbank transactions.
According to traders, consistent supply interventions and improved transaction matching have helped reduce volatility in the market, keeping exchange rate movements within a relatively narrow band over the past week.
Daily trading averages in recent CBN-supervised sessions have hovered around the 1,373 naira range, signaling a period of short-term stability for the local currency despite lingering economic pressures.
Analysts believe the decision to maintain a tight monetary policy stance continues to support investor confidence in the foreign exchange market while helping the apex bank manage liquidity conditions more effectively.
The MPC noted that persistent inflationary pressures remain a major concern, making it necessary to sustain current policy measures aimed at stabilizing prices and protecting the value of the naira.
With interest rates remaining elevated, the broader economic strategy appears focused on defending the local currency and preventing excessive pressure on the foreign exchange market in the near term.
