Naira Depreciates Massively as CBN Implements Fifth Interest Rate Hike

The naira has experienced a significant drop in value against the dollar in the wake of the Central Bank of Nigeria’s (CBN) recent interest rate hike, marking the fifth increase this year. The Monetary Policy Committee raised the rate to 27.25%, triggering a sharp depreciation of the naira in the foreign exchange market.

According to data from the FMDQ, the naira traded at N1658.48 per dollar on Tuesday, a steep decline from Monday’s exchange rate of N1562.66. This represents a depreciation of N95.82 in just one day.

In the parallel market, the naira also saw a drop, closing at N1675 per dollar on Tuesday, down from N1665 the previous day—an N10 loss.

Despite an increase in foreign exchange turnover, which rose to $166.36 million on Tuesday from Monday’s $100.21 million, the naira’s value continued to slide. Market analysts attribute the depreciation to the uncertainty surrounding the CBN’s monetary policies, particularly the continuous hike in interest rates.