The Nigerian Naira has succumbed to further depreciation, tumbling to a new low of N1,590 per Dollar at the foreign exchange market, despite the Central Bank of Nigeria’s (CBN) recent interest rate hike to 26.75%.
This development has sparked concerns among market analysts and stakeholders, who had anticipated a stabilizing effect from the CBN’s monetary policy adjustment.
According to Dayyabu Ashiru, a Bureau De Change operator in Abuja, “We buy at N1,580 per dollar and sell at N1,590,” indicating a N20 loss from the previous day’s exchange rate of N1,570.
This slump is further corroborated by FMDQ data, which reveals a N48.44 depreciation in the Naira’s value, from N1,500.32 to N1,548.76 per Dollar.
The CBN’s decision to raise the interest rate, aimed at curbing inflation and bolstering the nation’s currency, appears to have had an inverse effect.
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The Naira’s decline has raised questions about the efficacy of the CBN’s monetary policy tools in stabilizing the foreign exchange market.
Despite the apex bank’s efforts to inject liquidity, selling $106.5 million in foreign currency to authorized dealers, the Naira’s value continues to plummet.
This downward spiral may have far-reaching implications for importers, exporters, and individuals relying on foreign transactions, as the increased interest rate aims to reduce inflation but may also affect economic growth.
As the Naira’s value continues to erode, market participants eagerly await the CBN’s next move to stem the currency’s decline and restore stability to the foreign exchange market.
