The Nigerian naira remained under pressure in the parallel forex market on Thursday, trading flat at N1,660 per U.S. dollar, despite the U.S. Federal Reserve cutting interest rates. The British pound also held steady against the naira, closing at N2,220 per pound.
This stability comes amid the U.S. dollar’s resilience, driven by signals from the Federal Reserve that further rate hikes could follow despite the recent cut. Analysts suggest that the naira may face additional pressure as demand for foreign currency continues to rise for imports, tuition, and travel.
In spite of interventions by the Central Bank of Nigeria (CBN), the naira’s decline persists, exacerbated by low oil production, which remains a key source of foreign exchange for the country.
The U.S. dollar gained ground following the Fed’s decision to lower interest rates by 50 basis points to a range of 4.75% to 5.00%. Federal Reserve Chairman Jerome Powell highlighted ongoing concerns over inflation and labor market weakness, indicating that further rate cuts could be in store if economic conditions require.
The strong performance of the U.S. dollar against global currencies has contributed to the naira’s struggles, with traders anticipating further pressure on the Nigerian currency in the coming months.
Technical indicators show that the U.S. Dollar Index remains in a bearish zone, yet with traders still betting on future rate cuts, concerns over a prolonged period of high rates remain. Powell also noted that the U.S. economy remains resilient, adding confidence in the Federal Reserve’s gradual approach to stabilizing inflatio
