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 may be due to increasing market demand and ongoing FX shortages.
The central bank’s move 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 last MPC meeting, caused the exchange rate to fall.
Recall that the CBN stopped selling Forex to Bureau De Change operators and the naira has been in free fall ever since as liquidity in the market is tightening.
“The MPC urgently needs to address the downward spiral of the naira with appropriate policy measures to improve exports, harmonize rates and encourage import substitution,” said Taiwo Oyedele, Head of Tax and Corporate Advisory Services at PwC Nigeria.
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