CBN Fails to Hold MPC Meeting as Naira Plunges to Record Low Against Dollar

The naira, Nigeria’s currency, suffered a sharp decline against the US dollar on Wednesday at the foreign exchange market.

According to official data from FMDQ, the naira closed at N840.53 per dollar on Wednesday, compared to N830.97 on Tuesday, a depreciation of N9.56 or 1.15 per cent.

This is the second time in a week that the naira has lost value on the official FX market, where the Central Bank of Nigeria (CBN) intervenes to stabilize the exchange rate. The naira also weakened at the parallel market, where it traded at N1,150 per dollar on Wednesday, from N1,130 on Tuesday.

The naira’s woes coincided with a surge in forex turnover, which increased by 61.86 per cent to $198.21 million on Wednesday. The increased demand for dollars may have put pressure on the naira, as the CBN struggles to meet the forex needs of various sectors of the economy.

The naira’s depreciation also comes amid a leadership crisis at the CBN, as the governor, Dr Olayemi Cardoso, failed to convene a Monetary Policy Committee meeting for the second consecutive month.

The MPC is the highest decision-making body of the CBN, which sets the benchmark interest rate and other monetary policy parameters.

The naira has been volatile in the FX market since the CBN introduced a series of reforms in June this year, aimed at unifying the multiple exchange rates and improving forex liquidity.

However, the reforms have not yielded the desired results, as the naira continues to face downward pressure from low oil prices, dwindling foreign reserves, and weak economic growth.

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