The value of the Nigerian Naira plunged to a new record low on Thursday morning, trading at a minimum of N730 to $1, down 0.69 percent from the previous day.
According to black market vendors, the decline can be due to the market’s rising demand and ongoing FX shortage.
The action by the Central Bank to raise the interest rate to a 20-year high of 15.5%, reflecting a 150 basis point rise from the 14% declared at the previous MPC meeting, is what caused the exchange rate to decline.
Recall that the CBN discontinued the sale of forex to Bureau De Change operators, and the Naira has been on a free fall since then, with liquidity tightening in the market.
“The MPC urgently needs to address the naira’s downward spiral with appropriate policy interventions to improve exports, harmonise rates and promote import substitution,” said Taiwo Oyedele, Head of Tax and Corporate Advisory Services at PwC Nigeria.
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