Naira Depreciates to N1,359/$ After CBN Rate Cut

The Naira slid to N1,359/$ on Tuesday, following the conclusion of the 304th Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN), where a 50 basis point interest rate cut was announced, bringing the rate to 26.5%. This depreciation from N1,353.5 recorded on Monday indicates mild pressure in the official foreign exchange market.

The MPC's decision reflects cautious market sentiment despite improvements in macroeconomic indicators. CBN Governor Olayemi Cardoso noted that this rate cut marks the highest level in 13 years and aims to contribute to greater stability in the foreign exchange market and bolster investor confidence.

The MPC retained the cash reserve ratio at 45.0% for commercial banks and 16.0% for merchant banks, maintaining a liquidity ratio of 30.0%. The decision to cut rates signals a shift towards monetary easing, although the retention of key policy parameters indicates continued caution ahead of future MPC meetings.