Nigeria’s currency, the naira, dramatically declined yesterday by N95.83 on its official foreign exchange market, as the Central Bank of Nigeria (CBN) continued with its rate hikes, its fifth of the year.
Based on data from FMDQ Securities Exchange Limited, the naira depreciated against the dollar by 5.8 percent to an exchange rate of N1,658.48, from N1,562.66 on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
The CBN increased the Monetary Policy Rate (MPR) by 50 basis points this month, after the MPC meeting held on Wednesday, to 27.25%. This was aimed at controlling inflation and stabilizing the naira.
As for the volatility of the naira, CBN Governor Olayemi Cardoso explained the cause to be, inter alia, the degree of Federal Account Allocation Committee (FAAC) disbursement and the banking system liquidity level.
In the black market, the naira also weakened against the dollar, selling at N1,675, losing N12 from a previous N1,663. However, analysts observe that despite the CBN’s intervention to fortify the naira, there are more overriding factors that affect the currency in the current economy.
