Naira depreciated by N24 to close at N385 per dollar on Thursday at the official market. It had exchanged at N361 to a dollar on Wednesday as demand pressure intensified.
The pressure on the Naira was heightened after news of the Federal Government’s plan to adopt a flexible exchange rate broke.
The International Monetary Fund (IMF), had consistently advised the Central Bank of Nigeria (CBN) to adopt a flexible exchange rate regime to stop inflation rise.
The inflation rate, which rose to 12.4 percent year-on-year in May continued to rise in recent months as the impact of the Covid-19 pandemic reflected on the economy.
The May inflation rate was 0.06 percent points higher than the rate recorded in April 2020 at 12.34 percent. On a month-on-month basis, the Headline index increased by 1.17 percent in May 2020, this is 0.15 percent rate higher than the rate recorded in April 2020 at 1.02 percent.
This was despite the sustained upward pressure on consumer prices as headline inflation rose 1.2 percent month-on-month from one percent, the highest since June 2018. Notably, core inflation rose faster by 14 basis points to 10.1 percent year-on-year from 10 percent in April 2020, the highest since July 2018.
However, core inflation increased five basis points, slower at 0.9 percent on a month-on-month basis, the first moderation since February 2020. Meanwhile, food inflation was little changed at 15.04 percent year-on-year from 15.03 percent in the previous month.