Comment on the CBN MPR decision

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Comment on the CBN MPR decision

by Lukman Otunuga, Senior Market Analyst, FXTM



The CBN decision is likely to have a stabilizing and even potentially positive impact on the Naira, which has gained 6% year-to-date.

Growing confidence over the Nigerian economy in the face of lower rates, FX liquidity and rising FX reserves which reached a 13-year high should provide a solid foundation for the Naira.

Even with the 50-bp rate cut, real rates remain high when accounting for inflation.

Most importantly, Nigeria’s interest rate is still one of the highest in Africa which may attract foreign portfolio investors, lending the Naira further support.”

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