Currency slips to ₦1,446.9/$1 as November closes, despite CBN’s tight monetary stance and ongoing market reforms….
The naira closed November on a slightly weaker footing, extending the pattern of volatility that has dominated Nigeria’s foreign exchange market in recent months.
Data showed that the currency traded at ₦1,446.9 per dollar on November 28, compared to ₦1,438/$1 at the start of the month. This represents a further depreciation from the ₦1,427.5/$1 recorded on October 31, highlighting the fragile stability of the market despite the Central Bank of Nigeria’s aggressive monetary tightening.
November saw only a brief period where the exchange rate exceeded the ₦1,450/$1 level. The spike lasted five days, with the naira trading at ₦1,458 on November 18, ₦1,451 on November 19, ₦1,459.95 on November 20, ₦1,458 on November 21, and ₦1,452 on November 24.
This short-lived surge contrasts sharply with October’s prolonged pressure, when the naira stayed above the ₦1,450/$1 mark for 18 consecutive days,one of the longest stretches of sustained depreciation so far this year.
October Comparison
October’s FX market pressure was significantly more intense, with the naira repeatedly trading between ₦1,460 and ₦1,474. It hit a monthly high of ₦1,474 on October 16. Throughout the month, daily fluctuations were wide and persistent, driven by high import demand, speculative activity, and inconsistent dollar supply to the official window.
Rates included ₦1,471 on October 17, ₦1,472.5 on October 15, ₦1,467.01 on October 14, and multiple readings in the mid-₦1,460s earlier in the month, demonstrating the depth of market strain.
CBN Maintains Monetary Parameters
A major development in November was the 303rd Monetary Policy Committee (MPC) meeting, held from November 24–25 in Abuja. The CBN held all key monetary indicators unchanged, reaffirming its focus on stabilising prices and restoring confidence in the FX market.
Key MPC Decisions:
- Monetary Policy Rate (MPR): 27%
- Cash Reserve Ratio (CRR):
- 45% for Deposit Money Banks
- 16% for Merchant Banks
- Liquidity Ratio: 30%
- Asymmetric Corridor: +50 / –450 basis points around the MPR
The MPC said maintaining the parameters was necessary to support ongoing disinflation, noting that headline inflation fell to 16.05% in October, down from 18.02% in September.
FX Market Reforms on the Way
The CBN also announced that it is finalising a revised foreign exchange (FX) manual aimed at enhancing transparency, improving documentation procedures, expanding market participation, and strengthening surveillance across the electronic FX system.
Governor Olayemi Cardoso disclosed this at the Chartered Institute of Bankers of Nigeria (CIBN) annual Bankers’ Dinner in Lagos, stating that the updated manual will form a crucial part of broader reforms to improve confidence in the naira.
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