FX Market Reacts Positively To Cardoso’s MPC Statement As Naira Appreciates
The pressure on the naira has decelerated following statement by the Central Bank of Nigeria Governor, Olayemi Cardoso, who said the naira has become competitive when compared with other currencies
Experts also argued that the comment has scared foreign exchange speculators, giving room for the naira to appreciate.
At the end of trading last Friday, May 23, 2025, the naira gained 0.28 per cent based on data from the CBN weighted average.
On Friday, the currency closed from N1,584.95, traded on Thursday to N1,580.44 per dollar on Friday.
This represents N4.51 appreciation in a day.
At the black market, the rates across Lagos, Abuja and Kano showed that the currency closed at 1,610 per dollar compared to N1,625 traded on Thursday.
This reflects N15 or one per cent gain against the US Dollars.
This gain was a market response to the recently concluded 300th Monetary Policy Committee Meeting of the CBN where the apex bank governor harped on transparency and a solid net reserves of over $25bn.
Recall that the naira depreciated from around N500 per dollar in 2023 to about N1800 per dollar in 2025 after the apex bank introduced market reforms, which include a managed float and reintroducing the ‘willing buyer, willing seller model.’
The reforms were aimed at attracting investors back to the country after rating agencies claimed that the naira was overpriced at around N500 per dollar in early 2023.
During the period, the spread between the official rate and the parallel market rate was over N300, giving room for round-tripping.
“I dare say that if those actions had not been taken when they were, the results would have been a lot more disastrous. It would have been not even more, they would have been disastrous for us,” he said on the currency depreciation.
Cardoso said at the MPC that the journey that the reforms will begin to yield greater results as time goes on.
He explained, “On the issue of depreciation of the currency, which obviously everybody is always very interested in, you find out that the various currencies of the world were under attack and were having to defend themselves. You find that relative to other countries, Nigeria came out very well indeed.
“We were able to ensure that our depreciation was very, very modest and that the stability was pretty much there. And that, in my view, was a reflection of a lot of the measures that we had taken prior to this time to stabilize our economy.”
He said it was the right decision for the apex bank to have started the reforms early, adding that “we stayed the course to the point where we built buffers which are able to withstand shocks that come in.”
FX Market Reacts Positively To Cardoso’s MPC Statement As Naira Appreciates is first published on The Whistler Newspaper
