The Naira posted its worst dip since April despite the weakening U.S. dollar index.
The dollar index, which measures the greenback against a basket of currencies, was barely on the 104-index point support line as traders awaited the U.S. Fed interest rate decision.
The Nigerian Naira declined for the fifth day in a row amid efforts by the Central Bank of Nigeria (CBN) to stabilize the market.
The naira traded at N1,644/$1 against the haven currency as the dollar index moderated significantly, while market players awaited America’s inflation data and the U.S. Federal Reserve’s interest rate decision due later in the day.
The naira’s loss in value this month has mainly been attributed to increased demand pressure from importers, payment of foreign school fees, and summer vacations by the Nigerian upper class.
Price action shows that naira bulls can’t hold the N1,600/$1 borderline, as an uptick in the CBN’s FX reserves moderated concerns in the country’s FX market. A break above that support line could set the local currency on a path to a February 24 low. The naira’s value against the greenback also moderated to record lows at the Nigerian Autonomous Foreign Exchange Market (NAFEX).
FMDQ data revealed the local currency’s value dipped by N9.72 against the US dollar to trade at N1,621.12/$1, down from N1,611.40/$1 on Monday.
The CBN, via Hakama Sidi Ali, acting director of the CBN’s Corporate Communications Department, stated that the Nigerian apex bank is making efforts to stabilize the foreign exchange market.
