December 02, (THEWILL) — The naira weakened to N1,446 per US dollar at the official market in November, closing the month lower despite the Central Bank of Nigeria’s (CBN) continued monetary tightening aimed at stabilising the foreign-exchange market.
The latest data showed that the currency lost ground even as the CBN maintained a firm policy stance. At its 303rd Monetary Policy Committee (MPC) meeting on November 25, the Bank held the Monetary Policy Rate at 27 percent, kept the Cash Reserve Ratio at elevated levels, and retained all other key parameters designed to reduce liquidity and tame inflationary pressures.
Despite these measures, the FX market remained under pressure. Demand for dollars from importers, manufacturers, and individuals continued to outpace supply, contributing to the naira’s depreciation.
Analysts note that although the CBN has gradually reduced direct intervention in the market, emphasising a more market-driven exchange-rate regime, persistent structural challenges continue to weigh on the currency.
The slide in November also reflected widening gaps between the official and parallel-market exchange rates, underscoring lingering volatility as businesses struggle to secure adequate forex through formal channels.
Economic analysts warn that the sustained depreciation could heighten inflationary pressures, raise operating costs for companies reliant on imported inputs, and slow investor confidence. They add that while tight monetary conditions may curb inflation, broader reforms and stronger FX inflows will be needed to achieve lasting stability in the currency market.
The CBN has not announced any major policy adjustments following the November decline, though officials maintain that improving market liquidity and strengthening reserves remain top priorities as the apex bank works to restore confidence in the naira.
Ogochukwu Onwaeze
