The naira is poised to maintain its upward trajectory against the US dollar, propelled by the recent decision of the Central Bank of Nigeria (CBN) to increase interest rates.
However, the banking sector may resist a new regulation that excludes retained earnings from capital requirement calculations.
Since the onset of March, Nigeria’s local currency has exhibited remarkable resilience, emerging as one of the top-performing currencies across Africa, with a notable 11.04 percent surge.
Financial analysts anticipate the naira to conclude the upcoming week trading between N1,250 to N1,300 at the official market, while further gains are expected, potentially driving rates from N1,280 recorded on Thursday to N1,200 at the black market.
Under the leadership of Olayemi Cardoso, the Monetary Policy Committee (MPC) took decisive action on Tuesday, elevating the country’s lending rates by 200 basis points to 24.75 percent from the previous 22.75 percent in February. This strategic maneuver aims to bolster investor confidence and mitigate inflationary pressures.
While the naira basks in this optimistic outlook, challenges loom on the regulatory front. Banks may resist a new directive that excludes retained earnings from capital requirement calculations, signaling potential pushback against stringent regulatory measures.
The Olayemi Cardoso-led Monetary Policy Committee (MPC) raised the country’s lending rates by 200 basis points Tuesday to 24.75 from 22.75 in February, a move geared to satisfy investors’ confidence and curb inflationary pressures.