The Nigerian currency crashed again on Tuesday, September 24, 2024, amid a hike in interest rates by the Central Bank of Nigeria (CBN).
The apex bank increased Nigeriaâs interest rates from 25.75% to 27.25, citing an increase in premium motor spirit (PMS) prices, otherwise known as petrol.
The interest rate increase came despite the dip in inflation reported by the National Bureau of Statistics (NBS).
Data from the FMDQ Exchange shows that the Nigerian currency dropped to one of its lowest levels in months, at N1,658.48 per dollar on Tuesday, September 24, 2024, as against the N1,562.66 per dollar it traded on Monday, September 23, 2024.
Information from the Nigeria Autonomous Foreign Exchange Market (NAFEM) shows that currency dealers quoted the dollar at a high of N1,682 per dollar and a low of N1,570.
The dollar supply in the official market hit $166.33 million.
Janet Ogochukwu, an economist and senior banker with one of the tier banks, said the naira dropped in value because CBNâs hike in interest rates spooked investors.
She disclosed that the CBN’s rate hikes will affect the local currency and the countryâs bonds.
The development comes as Nigeriaâs external reserves hit a 22-month high of $37.31 billion, showing significant FX inflows into the countryâs coffers.
However, the inflows have failed to positively affect the naira, which became one of the worst-performing currencies in the world, according to a recent Bloomberg ranking as of September 20, 2024.
TimesNow.com.ng earlier reported that Naira has kicked off the new week on a low against the US dollar in NAFEM.
New data from FMDQ securities shows that the naira depreciated to N1,562.66/$1 at the close of business on Monday, September 24, 2024.
The new exchange rate represents a 1.37% decline compared to the previous closing rate of N1,541.22/$ on Friday last week.
Source: TimesNow.com.ng
