The Nigerian naira suffered its steepest daily decline in nearly three months, closing at N1,389 against the United States dollar at the official foreign exchange market.
The News Chronicle reports that the local currency lost N16 in a single trading session, sliding from N1,373 per dollar recorded a day earlier as pressure from a stronger global dollar intensified.
Central Bank of Nigeria statistics showed the naira traded between N1,368 and N1,392 during the session, with the interbank market seeing more activity. The most recent exchange rate shows a turnaround from the relative stability the currency experienced throughout much of June and marks the lowest official closing level since early April.
Market observers link the most recent depreciation to increased demand for dollar-denominated assets as consumers respond to predictions that interest rates in the United States may stay high for longer. The stronger dollar keeps hurting various developing market currencies, including the naira.
Improved foreign reserves in Nigeria, which just topped $51 billion for the first time in more than ten years, don’t help to stop the fall. Although the Central Bank keeps chasing currency changes and liquidity improvements, traders are concentrated on world events that might affect the naira’s value in the next weeks.
