The value of Nigeria’s money, called the naira, has dropped a lot compared to the dollar. It went above 16,000 naira for one dollar in the official market. This drop happened because the people managing the U.S. money are not being as relaxed as before.
In a place where naira is traded, called the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira lost some value. Now, one dollar is worth about 1,658.97 naira, up from 1,552.92 naira just a day earlier.
Some rich people from outside Nigeria think it’s good that the naira value went down and that gas prices are higher. But most Nigerian people are not happy because things cost more, and this has caused people to protest. The police have not been kind in stopping these protests.
An important money expert named Indermit Gill said, “The naira is in a good spot right now, better than it has been in 20 years.” He spoke in Abuja at a big money meeting and said, “This is a great chance for businesses to do well.”
Gill also said that what the Nigerian government did last year with money and energy helped a lot. Nigeria is Africa’s biggest place for making oil. But because of many problems over time, Nigeria has many very poor people. The World Bank says naira is one of the weakest kinds of money in its part of the world in 2024. The naira lost about 43% of its worth from January to August 2024, making it one of the weakest alongside money from South Sudan and Ethiopia.
Taiwo Oyedele, another important person who helps with country money rules, says Nigerian companies pay about 3.5 billion dollars in taxes to other countries each year. This also makes the naira weak.
American Dollar Grows Stronger with Good News
Good news about jobs and prices in America is making people expect that the folks managing U.S. money won’t lower interest rates quickly. Some officials, Kashkari and Waller, said that any cuts would not be as fast as people thought.
According to a tool from CME Group, most traders believe there will be a small decrease in interest rates when money people in the U.S. make their decision on November 7. But some expected a bigger cut before. They also think more rate cuts will occur if former President Donald Trump wins again because he favors a strong dollar.
The way the dollar’s worth has moved recently makes people hopeful. It crossed above a certain point and is getting closer to another big goal. But some signs say the dollar is really high now, so people might start selling to make money.
People still believe rates will go down by 50 points this year, but money experts are sounding more cautious. A money expert from Atlanta, Raphael Bostic, said he only plans to cut by 25 points this time. Another from San Francisco, Mary Daly, mentioned a few more cuts in 2024 might be okay. Meanwhile, everyone’s waiting to see what the European money managers decide on Thursday. Their decisions might not matter much if they do what people expect and keep interest changes small.