In the black market, the Nigerian naira lost N5 against the dollar, trading at N1,645/$1, down from N1,640/$1.
In the official window, the naira dropped even further against the US dollar on Wednesday, September 4, 2024. Data from the Nigerian Autonomous Foreign Exchange Market shows that the local currency traded at N1,625/$1, down from N1,611/$1 on Tuesday.
The central bank has increased its benchmark interest rate by 15.25 percentage points since 2022, reaching a record 26.75 percent in July, in an effort to stabilise the country’s FX market. The Monetary Policy Committee of CBN is set to convene on September 23 and 24.
The pressure on the local currency market has intensified due to increased demand from travellers and importers during the summer holidays.
Although Nigeria’s FX assets have grown, instability, depreciation, and a lack of dollar liquidity have further complicated the central bank’s efforts to strengthen the naira. The naira was the world’s worst-performing currency in the first half of the year.
Expectations that the CBN would pause interest rate hikes this month were dashed by a 45 percent increase in gasoline prices and continued pressure on the naira.
However, S&P Global claims that the Dangote Oil Refinery and Petrochemicals enterprise has the potential to drive economic growth in Nigeria, while simultaneously addressing the country’s foreign exchange challenges and easing pressure on the local currency.