Naira Holds Firm Against Dollar After CBN Retains Interest Rate At 26.5%

The Naira maintained relative stability against the United States Dollar on Thursday at the Nigerian Foreign Exchange Market following the decision of the Monetary Policy Committee of the Central Bank of Nigeria to retain the Monetary Policy Rate at 26.5 per cent.

Data from the opening trading session on Thursday showed the local currency exchanging at N1,371.25 to the Dollar in the official market, reflecting a steady performance compared to recent trading sessions.

The development comes after the 305th meeting of the MPC held on May 19 and 20, where all 11 committee members voted to retain the benchmark interest rate and other key monetary policy parameters.

Recent transactions in the official market have seen the Naira trade around the N1,373 range, with liquidity levels remaining relatively stable amid consistent interbank activities.

Market participants attributed the calm trading environment to sustained foreign exchange interventions and improved transaction matching, which helped prevent sharp fluctuations in the morning session.

Speaking after the two-day meeting, Governor of the Central Bank of Nigeria, Olayemi Cardoso, said the committee also retained the Standing Facilities Corridor around the MPR at +50/-450 basis points.

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According to the apex bank, the decision to maintain rates at current levels was driven by persistent inflationary pressures and the need to sustain macroeconomic stability.

The MPC’s decision signals the continuation of a cautious monetary policy stance aimed at controlling inflation while preserving the recent stability recorded in the foreign exchange market.

Analysts say the retention of the Monetary Policy Rate is expected to support the CBN’s liquidity management efforts and help sustain confidence in the local currency.

With interest rates remaining high, the broader economic environment continues to favour tight liquidity conditions designed to defend the Naira and stabilise the market against excessive volatility.