Naira Hits New Low Against USD: CBN’s Response and Market Analysis
On January 25, the Nigerian currency hit a new low against the U.S. dollar on the official market, briefly reaching NGN1,398 per greenback.
This brought it close to the parallel market exchange rate of NGN1,400:USD1, marking a significant depreciation. The decline started after Bola Tinubu assumed the presidency, succeeding Muhammadu Buhari and removing former Central Bank of Nigeria (CBN) Governor Godwin Emefiele. Under Emefiele, the Central Bank of Nigeria fixed the exchange rate at just under NGN500:USD1. The naira has continued to depreciate against major currencies under the new CBN leadership, attributed by experts to foreign exchange shortages.
CBN Governor Olayemi Cardoso, however, sees the naira as “undervalued” and has announced efforts to expedite genuine price discovery, emphasizing a coordinated approach for a more balanced and stable exchange rate. The CBN is also planning measures to ensure that it retrieves all foreign exchange inflows to the central bank. Cardoso hopes these reforms will lead to a consistent and stable exchange rate, fostering investor confidence and positioning Nigeria as an attractive foreign direct investment destination.
Clever Robot News Desk 29th January 2024
Related Article
