NAIRA WEAKENS TO N1,359/$ AFTER CBN CUTS RATE AT 304TH MPC MEETING

The naira depreciated to N1,359/$ on Tuesday following the conclusion of the 304th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).

The currency closed weaker compared to N1,353.5/$ recorded on Monday, reflecting mild pressure in the official foreign exchange market after the policy announcement.

The movement comes as investors digest the implications of the apex bank’s latest monetary policy decision under the Nigeria News Today macroeconomic update tracked by The Business Bureau.

Market Reaction to 50 Basis Points Rate Cut

Foreign exchange market data showed a slight weakening of the naira after the MPC announced a 50 basis points reduction in the Monetary Policy Rate (MPR), signaling cautious sentiment despite improving macroeconomic indicators.

1. The naira closed at N1,359/$ on Tuesday, down from N1,353.5/$ on Monday.
2. The CBN reduced the MPR from 27% to 26.5%.
3. Headline inflation declined for the eleventh consecutive month to 15.1% in January 2026.
4. Other policy parameters were left unchanged.

The MPC retained the Cash Reserve Ratio at 45.0% for commercial banks and 16.0% for merchant banks, maintained the Liquidity Ratio at 30.0%, and kept the Standing Facilities Corridor at +50/-450 basis points around the MPR.

External Reserves Hit 13-Year High

At the meeting, CBN Governor Olayemi Cardoso disclosed that Nigeria’s gross external reserves rose to $50.45 billion as of February 16, 2026 — the highest level recorded in 13 years.

“Without market confidence, no matter what you do, you will significantly suboptimise,” Cardoso stated, emphasizing the role of investor confidence in sustaining foreign exchange stability.

The MPC highlighted what it described as a “remarkable performance of Nigeria’s external sector,” noting that stronger reserves have supported improved liquidity conditions in the official window.

Mixed Post-MPC Currency Performance

The naira’s reaction to the 304th MPC decision contrasts with movements recorded after previous meetings.

• After the 303rd MPC meeting, the naira appreciated to N1,441/$.
• Ahead of that November meeting, it strengthened to N1,452/$ from N1,458/$.
• Following the 302nd MPC meeting, the currency weakened to N1,493.2/$ from N1,491.49/$.

These varied outcomes suggest that foreign exchange movements are shaped not only by interest rate adjustments but also by broader liquidity dynamics, capital flows, and investor expectations.

Measured Shift Toward Easing

The latest rate cut marks a cautious pivot toward monetary easing after an extended tightening cycle aimed at stabilising inflation and the naira.

However, the retention of other key policy tools signals that the CBN remains vigilant about inflation risks and exchange rate stability.

Analysts note that sustained reserve growth, portfolio inflows, and improved oil receipts will remain critical in determining whether the naira stabilises in the coming weeks.

This report forms part of The Business Bureau’s ongoing financial market coverage under Nigeria News Today.
Source: The Business Bureau