British pound crashes as Naira gained over N200/£ amid CBN’s directives to banks, BDCs, others

The Nigerian currency has gained massively against major foreign currencies as the CBN continued with directives helping to strengthen the local currency.

Analysis by Legit.ng showed that the naira gained by N295.07/£ in March.

According to CBN data, the naira started the month at N1,942.19/£ while it closed at N1,647.12/£ based on the record obtained for the 27th of the month.

During the period, the pound sterling recorded its highest at N2,090 in the second week of the month while it recorded its lowest in the last week at N1646.49/£.

The improvement during the month followed efforts by the CBN to the local currencies.

Recall that in a recent circular, the apex bank pegged a new round of $10,000 forex sales to licenced Bureau De Change (BDC) operators at N1,251/$1.

On Tuesday, February 27, 2024, the CBN confirmed that it cleared an additional $400 million FX backlog of verified and genuine forward requests.

The CBN governor, Olayemi Cardoso, disclosed this after the two-day Monetary Policy Committee meeting, which increased the country’s Monetary Policy Rate (MPR) by 400 basis points to 22.77% from 18.75% in July last year.

In a recent report, the apex bank’s Monetary Policy Committee (MPC) raised the benchmark interest rate by 200 basis points to 24.75%.

According to the CBN governor, the recent action is a component of the nation's efforts to counteract the growing inflation rate, estimated to be 31.70% in February.

Analysts said the development would reduce their ability to access credit for investment (businesses) or consumption (individuals).

Fidelis Obaniyi, an economist, said:

“Savers/investors may benefit from higher interest rates on savings and other commercial banks investments. However, people who invest in variable-rate loans may experience financial strain due to higher monthly repayments.”