Naira Gains, Now N158.95 To Dollar By FAVOUR AGBI, with Agency report

LAGOS – Naira increased slightly, yesterday, after the aggressive Central Bank of Nigeria’s, CBN, hike in interest rate.

The naira opened at N158.60 against the dollar on the interbank market, up 3.4 per cent from Monday’s close of N164.20 and five per cent firmer than the record low of 167.8 plumbed shortly before Monday’s unscheduled Central Bank meeting.

Naira, which gained three per cent after the CBN tightening measures, was the world’s best performing currency on the day, and the unit stood at N158.95.

CBN hiked the benchmark interest rate, the Monetary Policy Rate, MPR, by 275 basis points to 12 per cent and implemented several other tightening measures to counter pressures on the currency and inflation.

Most analysts had expected CBN to raise rates by 100 basis points at the extraordinary meeting, which was called in response to a sharp depreciation of the naira.

Dealers noted that, the tightening will create an incentive for investors to hold the naira and free up dollar supply, but the central bank will have to back its actions by meeting dollar demand at its auctions.