Naira to Remain Stable on Back of MPC Meeting

• Naira to Remain Stable on Back of MPC Meeting

The naira is expected to remain stable, following the decision of the Central Bank of Nigeria’s Monetary Policy Committee to retain the Monetary Policy Rate at 14 per cent.

The committee maintained its tight policy on interest rates to support currency.

The MPC had last Wednesday kept the benchmark interest rates on hold at 14 per cent, a level it has retained for over a year to curb inflation and prop up the naira.

The CBN has also been mopping up naira liquidity to curb speculation on the currency.

On the official market, the naira was quoted at around N305.60 to the dollar, supported by the CBN. It traded at 360 per dollar for investors.

The local unit closed at 362/dollar on the parallel market on Friday, the same level it has remained for a long time.

Meanwhile, Kenya’s shilling and the Zambian kwacha are expected to firm on the back of increased demand for local currency, while the naira and Ghana’s cedi are set to hold steady, Reuters reported.

The shilling is expected to strengthen against the dollar this week, on the back of increased interbank borrowing of local currency to meet the credit reserve ratio.

On Friday, commercial banks quoted the shilling at 100.95/101.15 per dollar, compared with 100.80/101.00 a week ago.

Ghana’s cedi is seen stable on sufficient dollar inflows, with the Bank of Ghana set to launch weekly sales to match corporate demand.

Uganda’s shilling is expected to trade in a narrow range, awaiting a cue from a central bank key rate decision, although moderate weakening is likely.

The kwacha is expected to continue trading on the front foot next week, propped by hard currency conversions by companies preparing to pay taxes due by April 15.