Naira’s Appreciation Against USD Continues Amid CBN’s Interest Rate Hike
The Nigerian naira sustained its upward trajectory against the US dollar on Monday, reaching rates of N1,290 and N1,382.95 per USD in both parallel and official foreign exchange markets. This surge coincided with the Central Bank of Nigeria’s decision to increase interest rates.
According to Mistila Dayyabu, a Bureau De Change Operator in Wuse Zone 4 Abuja, the naira traded at N1,290 per USD on Tuesday, marking a significant gain from the N1,360 per USD recorded on Monday. Dayyabu noted that the currency continued its upward trend, with buying and selling rates at N1,285 and N1,290 respectively on Tuesday evening.
Meanwhile, data from the Financial Markets Dealers Quotations (FMDQ) platform revealed that the naira exchanged at N1,382.95 per USD on Tuesday, compared to N1,408.04 the previous day, indicating a notable gain of N25.09 against the US dollar in the forex market.
The naira’s appreciation comes in the wake of the Central Bank of Nigeria’s Monetary Policy Committee Meeting, which decided to raise interest rates by 200 basis points to 24.75% from 22.75%. This move is aimed at addressing inflationary pressures and stabilizing the country’s currency.
In a significant intervention, the CBN sold $10,000 to each Bureau De Change operator at a rate of N1,251 per US dollar on Monday. This action underscores the central bank’s commitment to maintaining liquidity in the foreign exchange market and supporting the naira’s value.
Looking ahead, analysts at Goldman Sachs have projected that the naira will appreciate further to N1200 per US dollar within the next 12 months. This forecast reflects growing confidence in the Nigerian economy and the effectiveness of monetary policies implemented by the CBN.
Overall, the recent appreciation of the naira against the US dollar signals positive developments in Nigeria’s foreign exchange market. However, sustained efforts will be required to address underlying structural challenges and ensure stability in the currency’s value over the long term.
