See the rate of Naira to Dollars as Naira’s Fate Hangs in Balance, Inflation Hits 28-Year High
LAGOS – The Naira continues to face significant challenges as Nigeria’s inflation rate reaches its highest point in nearly three decades.
In May, the Nigerian currency weakened in the official market, coinciding with a rise in the country’s headline inflation rate to levels not seen in 30 years. The Naira hit record lows in both official and unofficial markets due to increased demand for foreign exchange and rising prices for goods and services nationwide.
In response, the Nigerian government has implemented various measures and reforms aimed at stabilizing the foreign exchange market and curbing speculative activities. The weakening currency has driven up import prices, particularly for food, as Nigeria heavily relies on imported goods. This depreciation has led to higher tariffs, further escalating the prices of several items.
At the close of trading on Friday, data from FMDQ Securities Exchange Limited indicated the Naira lost 0.45 percent of its value, with the dollar trading at N1,482.72, compared to N1,476 on the previous trading day at the Nigerian Autonomous Foreign Exchange Market. The supply of dollars by voluntary sellers and buyers surged by 96.6 percent to $183.47 million on Friday, up from $92.68 million the day before. The intraday high worsened to N1,490 against the greenback on Friday, compared to N1,500/$1 on Thursday.
On Saturday, the National Bureau of Statistics (NBS) released data for May, revealing that consumer prices rose by an annual rate of 33.95 percent, up from 33.7 percent in April. The increase in food prices was driven by higher costs for meat, fish, and potatoes. Food inflation climbed from 40.3 percent in April to 40.66 percent in May, while core price growth, excluding energy and agricultural products, accelerated to 27 percent from 26.8 percent.
The annual inflation rate for May also showed an 11.54 percentage point increase compared to the 22.41 percent recorded in May 2023.
“This shows that the headline inflation rate (year-on-year basis) increased in the month of May 2024 when compared to the same month in the preceding year (i.e., May 2023),” the NBS reported.
