Now Reading: Nigeria’s naira hits record low of 1,662 against dollar
-
01
Nigeria’s naira hits record low of 1,662 against dollar
The Nigerian naira has plunged to a record low of 1,662 naira against the US dollar in official trading on Tuesday, before closing at 1,658 naira. The latest decline extends a long slide since the central bank floated the currency in June 2023, when it traded at around 750 naira to the dollar.
The currency weakened 2.6% in Tuesday's session alone, according to data from the FMDQ exchange. Analysts say the naira faces pressure from persistent dollar shortages and low oil output, Nigeria's primary export earner. The country's foreign exchange reserves have fallen to roughly $34 billion, limiting the central bank's ability to intervene.
The naira's devaluation feeds into inflation, which hit 34.2% in June, squeezing household purchasing power. The central bank's next interest rate decision is expected in September. Policymakers must balance containing inflation against supporting economic growth.
Indian Opinion Analysis
The devaluation of the Nigerian naira has deepened since the central bank allowed it to float freely in June 2023. The official exchange rate has weakened from about 750 naira to the dollar to over 1,600 naira in recent days, reflecting persistent dollar shortages and market jitters. On Tuesday, the currency hit a record low of 1,662 naira per dollar in official trading, before closing slightly stronger. Analysts attribute the slide to low oil revenues, Nigeria's main export, and delayed reforms. The naira's weakness has fuelled inflation, which exceeded 34% in June, and eroded living standards. A major test for the currency will come when the central bank next sets the benchmark interest rate, expected in September, as policymakers weigh price stability against growth.
Coverage: 4 sources, 3 neutral
Sources (4): ndtvprofit.com (neutral report), economictimes.indiatimes.com (neutral report), livemint.com (neutral report), inc42.com
This story was synthesised by AI from the 4 sources linked above. Methodology and corrections.
Updated: this story now draws on 4 sources.
