Nigeria’s currency, the naira, recorded a slight gain on Monday, appreciating to ₦1,597 per US dollar at the official exchange window, according to data released by the Central Bank of Nigeria (CBN). This marks a small but positive move from Friday’s closing rate of ₦1,599.01/$1.
In the parallel market, the naira also improved modestly, trading at ₦1,627/$1, compared to ₦1,628/$1 at the end of last week, based on market insights from Lagos-based sources.
The upward movement reflects the naira’s relative stability over the past week, as it continues to show resilience despite ongoing foreign exchange pressures. Intra-day trading data revealed some volatility, with exchange rates fluctuating between ₦1,580 and ₦1,601.5 per dollar.
Markets Await MPC Decision
All eyes are now on the Central Bank’s Monetary Policy Committee (MPC), which is holding its milestone 300th meeting on May 19–20. The committee is expected to respond cautiously to current economic indicators, particularly persistent inflation and foreign exchange instability.
While many economists believe the CBN will maintain the current Monetary Policy Rate (MPR) at 27.5%, some suggest a slight hike of 25 basis points remains possible. This would aim to reinforce the bank’s anti-inflation stance and support macroeconomic stability.
At its last meeting in February, the MPC kept all key policy rates unchanged, including the MPR at 27.5%, the liquidity ratio at 30%, and the cash reserve ratio at 50% for commercial banks and 16% for merchant banks.
BDCs Face Uncertainty Amid Recapitalization Deadline
Meanwhile, significant uncertainty looms over the Bureau De Change (BDC) sector. Over 95% of BDC operators have yet to meet the CBN’s new capital requirements, raising fears of widespread shutdowns across the foreign exchange retail market.
Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), revealed that only a small fraction of operators have complied with the new regulations. He called for a deadline extension to allow more operators to meet the revised thresholds.
The CBN’s updated capital structure, announced in May 2024, introduced steep increases: ₦2 billion for Tier 1 licenses and ₦500 million for Tier 2 licenses, a sharp rise from the previous ₦35 million requirement.
As the compliance deadline approaches, industry stakeholders continue to advocate for flexibility, warning that failure to ease the requirements could disrupt retail FX services and limit access for ordinary Nigerians.
