The naira has dropped to a record low of N1,667.42 per dollar in the official market on Wednesday. This followed the Central Bank of Nigeria’s (CBN) decision to raise its benchmark interest rate to 27.25 per cent in a bid to address rising core inflation.
The official rate fell by 0.54 per cent from Tuesday’s N1,658.48/$ closing at the Nigerian Autonomous Foreign Exchange Market (NAFEM). In the parallel market, the naira began at N1,597.98/$, fluctuating to as high as N1,674.00 before ending the day at N1,653.27.
Shortly after the CBN’s Monetary Policy Committee (MPC) announced its rate hike, the naira depreciated by N95.83 in the official foreign exchange market on Tuesday, marking a 5.8 per cent drop from Monday’s N1,562.66/$.
CBN Governor Olayemi Cardoso had explained that the MPC raised concerns over excess liquidity and foreign exchange pressures. Meanwhile, CBN announced plans to sell dollars to Bureau De Change (BDC) operators at N1,590/$ to enhance market liquidity. Each eligible BDC can buy up to $20,000, with a one per cent margin above the purchase rate. This move was well-received by BDC operators, who expect it to help stabilise the forex market.
However, experts point to Cardoso’s unstable policies over the past year as a driving force behind the naira’s decline. Despite efforts to tighten measures, the currency has continued its downward trend, and is now approaching N1,700/$.
Read More:
Naira Loses Over Half Its Value in Cardoso’s First Year as CBN Governor
Kebbi Govt Set To Remove Multiple Taxation To Ease Small Businesses
Naira Hits New Low of N1,670/$ After CBN Interest Rate Hike
About The Author
Leave a comment