Naira slips to N1,353.5/$ ahead of CBN’s 304th MPC decision

The naira weakened slightly in the official foreign exchange market on Monday, closing at N1,353.5/$ as investors positioned ahead of the 304th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN), scheduled to conclude in Abuja on Tuesday.

Data published on the apex bank’s website showed the local currency depreciated from N1,348/$ recorded last Friday, reflecting mild pressure in the Nigerian Foreign Exchange Market.

Intraday trading figures indicated that the naira exchanged at a high of N1,354.5/$ and a low of N1,343/$ before settling at a simple average rate of N1,349.24/$. The closing rate of N1,353.5/$ marked a marginal decline compared to the previous session.

While the official window recorded slight depreciation, the parallel market showed modest appreciation. The naira strengthened to N1,358/$ in the informal market, up from N1,361.5/$ quoted last Friday.

Meanwhile, Nigeria’s external reserves extended their upward trajectory, rising to $48.77 billion, according to CBN data. The increase in reserves suggests continued efforts to bolster foreign exchange liquidity and support macroeconomic stability.

The mixed performance across market segments reflects cautious trading as market participants await the outcome of the two-day MPC deliberations held on February 23 and 24, 2026.

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At the previous 303rd MPC meeting held in November 2025, the naira recorded gains across various foreign exchange segments amid improved liquidity conditions. The currency closed at N1,452/$ on November 24, 2025, strengthening from N1,458/$ recorded on November 21, 2025.

During that meeting, the MPC maintained a tight monetary policy stance. Key parameters were left unchanged in a bid to curb inflation and safeguard financial stability.

The committee retained the Monetary Policy Rate (MPR) at 27.00 per cent, held the Cash Reserve Ratio (CRR) at 45.00 per cent for Deposit Money Banks and 16.00 per cent for Merchant Banks, maintained the 75 per cent CRR on non-TSA public sector deposits, and kept the Liquidity Ratio at 30.0 per cent.

Headline inflation has moderated for eleven consecutive months, declining to 15.1 per cent as of January 2026. However, analysts remain divided on whether this trend alone justifies a shift in policy direction.

Some economists argue that despite easing inflationary pressures, the central bank may opt to maintain its current stance to consolidate gains and prevent renewed exchange rate volatility.

Others believe that strengthening external reserves and improving macroeconomic indicators could create room for a gradual and cautious easing cycle.

Adding to the debate, BMI, a unit of Fitch Solutions, recently projected that the naira’s recent gains may prove temporary, forecasting a modest weakening of the currency before the end of 2026.

With investors closely monitoring developments, the MPC communiqué is expected to provide clearer guidance on inflation management, liquidity conditions, and exchange rate stability in the months ahead.