» Naira Situation Worsens, Falls To N270/$ «

After a two-day meeting, the Federal Open Market
Committee (FOMC) of the US Federal Reserve Bank raised
its benchmark interest rate by 25 basis points to 0.25 per
cent to 0.50 per cent, a move certain to put more pressure
on the naira, which on Wednesday plunged to a new low at
the retail segment of the foreign exchange market to N270
to the US dollar.
Speaking on the first rate hike in almost a decade, the US
Fed Chairman, Janet Yellen, said that the increase was a
vote of confidence in the US economy, but stressed that
the pace of interest rate hikes would be gradual.
But whilst US markets may have hailed the decision and
saw the Dow Jones, S&P 500 and Nasdaq initially falter,
but later rallied to news on the rate hike, the same could
not be said of the Nigerian economy and the local
currency, which have been hit by dwindling revenue from
low oil prices.
Oil revenue accounts for 90 per cent of Nigeria’s foreign
exchange and 70 per cent of total revenue.
Low oil prices and forex currency curbs introduced by the
Central Bank of Nigeria (CBN) saw the naira fall yesterday
to a new low of N270 to the dollar on the unofficial market
after the central bank rationed dollar supplies for the third
week in a row, traders said.