Nigerian naira flat vs dollar ahead of rate decision

Wades of naira and dollar currencies

Nigeria's naira was flat against the U.S. dollar on the interbank market on Monday, as banks traded cautiously within a tight range in anticipation of tightening by the central bank's Monetary Policy Committee (MPC) on Tuesday.
The local unit closed unchanged at 164.95 to the dollar on the interbank market, the same level it closed on Friday.
Most analysts expect the central bank to hold rates at 12 percent for the fifteenth time in a row at its bi-monthly MPC meeting on Tuesday, although some predict the bank will sharply hike them in a bid to defend the ailing naira.
But the bank could take other measures to try to tighten policy. It hiked the cash reserve requirement (CRR) that lenders must hold against government deposits to 75 percent, from 50 percent, at its January meeting, in a bid to tighten liquidity and curb speculation on the weakening naira.
The regulator has also made regular direct interventions at the interbank market to provide dollar liquidity and reduce pressure on the local currency in the wake of the suspension of its governor, Lamido Sanusi, last month.
Traders said a further tightening of liquidity by the MPC after its meeting on Tuesday could boost support for the local currency.
A unit of France's Total sold about $80 million to some lenders on Monday, which provided some support for the local unit. The naira had traded as low as 165.30 to the dollar intraday, but reversed the loss after the dollar sale by Total and another from the local unit of a foreign bank, dealers said.
Dealers said the naira is expected to open at around 165.05 to the dollar on Tuesday and trade within a tight range as the market awaits outcome of the MPC meeting.