The naira appreciated marginally to N1,597/$1 on Monday at the official foreign exchange market, according to data published by the Central Bank of Nigeria (CBN).
This represents a slight improvement from Friday’s closing rate of N1,599.01/$1.
In the parallel market, the naira also recorded a minor gain, trading at N1,627/$1 on Monday, compared to N1,628/$1 on Friday, based on data from Nairametrics market sources in Lagos.
The modest appreciation reflects the naira’s continued show of resilience and relative stability over the past week.
Intra-day trading on Monday revealed ongoing volatility, with the currency fluctuating between a high of N1,601.5/$1 and a low of N1,580/$1.
Market eyes MPC decision amid inflation concerns
All eyes are now on the Central Bank of Nigeria’s Monetary Policy Committee (MPC), which is set to hold its milestone 300th meeting from May 19 to 20, 2025. Industry analysts expect a cautious but firm stance in response to current economic conditions.
The consensus among economists suggests that the MPC will likely retain the Monetary Policy Rate (MPR) at 27.5%, aiming to consolidate recent macroeconomic gains. However, a modest 25 basis point hike is also on the table, especially as inflation, while showing signs of easing, remains structurally high.
At its last meeting in February, the MPC kept key policy parameters unchanged:
- MPR at 27.5%
- Liquidity Ratio at 30%
- Cash Reserve Ratio (CRR) is at 50% for commercial banks and 16% for merchant banks.
According to Nairametrics experts who spoke to Nairametrics, they opine that the MPC may maintain its current posture but is unlikely to rule out a slight rate hike to reinforce a hawkish stance, particularly in light of persistent foreign exchange pressures and global uncertainties.
BDC sector in crisis as recapitalization deadline nears
Meanwhile, there is growing anxiety in the Bureau De Change (BDC) sector, with more than 95% of operators reportedly yet to meet the CBN’s new capital requirements.
In an exclusive interview with Nairametrics, the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, disclosed that fewer than 5% of its members have met the new recapitalization thresholds introduced by the CBN.
Gwadebe warned that the future of most BDC operators is uncertain unless the regulatory deadline is extended, raising concerns of a potential mass shutdown across the sector.
In May 2024, the CBN raised the minimum share capital for BDCs significantly:
- Tier 1 license – N2 billion
- Tier 2 license – N500 million
This marked a sharp increase from the previous N35 million required for a general license.
As the deadline draws closer, stakeholders continue to lobby for a review or extension to prevent widespread disruptions in the FX retail market.
