The Nigerian naira weakened slightly in the official foreign exchange market on Monday, closing at N1,353.5/$, up from N1,348/$ recorded last Friday. The decline comes as market participants position themselves ahead of the 304th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria in Abuja, set to conclude on Tuesday. Investors are keenly watching for signals on the apex bank’s monetary policy direction.
Intraday data showed that the naira traded between a high of N1,354.5/$ and a low of N1,343/$, settling at a simple average of N1,349.24/$. Meanwhile, the parallel market saw modest gains, with the currency strengthening to N1,358/$ from N1,361.5/$ last Friday. Official data also showed that Nigeria’s external reserves continued their upward trajectory, reaching $48.77 billion, reflecting cautious optimism among market participants.
The mixed performance across market segments underscores a wait-and-see approach, as investors anticipate the MPC’s guidance on inflation and liquidity. Historically, ahead of the 303rd MPC meeting in November 2025, the naira experienced gains across the FX market, supported by improved liquidity. At that time, key policy parameters, including the Monetary Policy Rate at 27%, were maintained to curb inflation and preserve financial stability.
Analysts remain divided on the likely outcome of the upcoming MPC meeting. While headline inflation has declined for eleven consecutive months to 15.1% as of January 2026, some experts caution that this may not be sufficient to justify an immediate rate cut. Others argue that strengthening external reserves and positive macroeconomic indicators could support a gradual easing of monetary policy.
As the 304th MPC meeting unfolds, market participants are closely monitoring the central bank’s decisions, which are expected to provide clarity on exchange rate stability, liquidity conditions, and inflation management. The naira’s slight dip ahead of the meeting reflects cautious trading, signaling that investors are preparing for potential policy shifts in the coming months.
source: nairametrics