The naira strengthened in the parallel market on Tuesday, closing at N1,520/$1, up from its previous rate of N1,525/$1.
This is a consolidation of the currency’s stability after maintaining the same rate for three consecutive trading days. Analysts attribute the improvement largely to the Central Bank of Nigeria’s (CBN) support and recent economic policies.
However, in the official Nigerian Foreign Exchange Market (NFEM), the naira moved in the opposite direction. It weakened slightly to close at N1,535/$1, compared to Monday’s N1,533/$1.
Market data showed the currency fluctuated between N1,534/$1 and N1,537/$1 during the day’s trading.
The naira’s mixed performance followed the Monetary Policy Committee (MPC) meeting on Tuesday, where the CBN decided to hold the benchmark interest rate at 27.5%.
While the decision aimed at curbing inflation and supporting price stability, manufacturers and businesses who had anticipated a rate cut were concerned about continued high borrowing costs.
This Naira/Dollar instability in Nigeria. This is actually posing a negative representation in the international trade thereby causing unexpected increase in the prices of products and services over time.