Naira Declines by 8.2% Against Dollar
Nigeria’s naira has continued its downward slide, falling to a new low of N1,677 per dollar at the official close on Wednesday, according to data from FMDQ compiled by Bloomberg.
This represents a decline of 8.2 per cent since the end of last week, as the local currency faces an ongoing scarcity of US dollars and dwindling foreign capital inflows into the country.
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Despite a 50 basis point interest rate increase by the Central Bank of Nigeria on Tuesday, raising the benchmark rate to 27.25 per cent, the naira failed to strengthen.
The rate hike was part of the CBN’s efforts to combat inflation, which is hovering near a three-decade high, but the local currency has remained under pressure due to low dollar inflows, Bloomberg reported.
“At one point, we saw significant foreign portfolio investment flows into the market, but that has slowed down considerably.
“If the economy can generate more dollars from both the oil and non-oil sectors, it will increase investor confidence and inflows, helping to stabilise the naira,” said Stanbic IBTC Bank Plc’s Muyiwa Oni.
