The nation’s currency, the naira on Monday gained against the US dollar across market segments of the foreign exchange following the decision of the Monetary Policy Committee (MPC) to retain key rates last week.
Consequently, naira strengthened by N1/$ or 0.4 percent at the Bureau De Change segment of the foreign exchange closing at N241/$ compared to N242 traded on Thursday last week.
In the same way, the local currency gained N0.50k/$ or 0.2 percent closing at N242.50/$ as against N243/$ last week Thursday at the parallel market.
At the inter-bank market, naira slightly appreciated in value by N0.09k/$ or 0.04 percent as it closed at N197.77k/$ compared to N197.86/$ traded on Friday last week according to the data obtained from Financial Markets Dealers quotations (FMDQ).
Analysts had anticipated naira would remain stable this week at the interbank market and Bureau De Change (BDC) segment of the foreign exchange market.
“We strongly believe that the decision of the Apex bank to hold on to its tight monetary stance in the face of waning economic growth is borne out of the need to keep the Naira “afloat” without necessarily devaluing the Naira. However, given the stern realities presented by softening crude oil prices and increasing volatility in the parallel segment of the FX market – a condition that has intensified speculative activities and round-tripping, we retain our position on the imminence of currency devaluation”, Olutola Oni and his team of analysts at WSCT Financial Services limited have said.
They believe the CBN’s tight policy stance and aggressive government borrowing on account of low government earnings will keep yields on fixed income securities attractive.
HOPE MOSES-ASHIKE
