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Naira Watch

Naira may face tough week due to new US interest rate policy

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Naira exchanges for N562 per dollar, as CBN moves to stop the slide

It is a new week, and currency traders will be hoping for better performance for Naira against foreign currencies, especially the dollar.

On Friday, June 17, the last trading day, the value of the Naira was unchanged against the United States Dollar in the various segments of the foreign exchange (forex) markets.

In the Investors and Exporters (I&E) window, the local currency was exchanged for the US Dollar at N420.50/$1, the same value it was transacted the previous day.

While at the Peer-to-Peer (P2P) window, the Naira showed no movement against the United States Dollar as it retained the rate of N617/$1.

Read also: Naira gains value against Dollar, Euro, Pound at official exchange market

This is likely to change this week no thanks to the US government’s decision on raising interest rates to 1.52%, the largest increase since 1994, to fight inflation.

Higher interest rates bring higher returns for investors, and money goes where money grows.

Nigeria is to a large extent a dollar-dominated society, making the economy exposed to the performance of the US currency.

Meanwhile at the interbank segment of the market CBN data shows that on Friday against the British Pound Sterling, the domestic currency closed flat at N505.19/$1, while against the Euro, it also closed flat at N432.34/€1.

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