Posted On: November 26, 2014
The naira plummeted to an all-time low of 177.30 in the foreign exchange market, its largest decline since December 2011, Bloomberg reported. The Nigerian currency has fallen 7.2 percent on the quarter.
The publication reported that a bear market for oil, which is responsible for approximately 70 percent of government revenue in Nigeria, has fallen 29 percent since June.
"There are still risks around oil prices," Ride Markus, a strategist at Barclays Africa Group Ltd., told Bloomberg. "It could get worse for them."
While the decline of the oil market has drawn plenty of attention, the publication added that it may have overshadowed yesterday's decision by Nigerian Central Bank Governor Godwin Emefiele to increase the key lending rate to a record 13 percent. Emefiele's 1 percent increase marked the rate's first rise in three years.
Nigeria has spent billions of dollars in the past year to repair the health of the naira, Emefiele told BBC News. The publication also noted that the nation's foreign reserves sit at approximately $37 billion, an 18 percent decrease from the previous year.
Razia Khan, head of Africa research at Standard Chartered Bank, said that despite the challenges, the central bank's recent moves have shown a full commitment to the issues.
"They have not shied away from the tightening need to sustain current [foreign exchange] reserves," Kahn told BBC News.
Category: Industry News
Foreign Exchange Services for Business
With a focus on payment services, Western Union Business Solutions enables businesses of all sizes to send funds internationally through our global payment solutions.
See our available FX payment services