In Nigeria, the local money called the Naira is losing value compared to the US dollar. This is because the US dollar is getting stronger.
On Wednesday, for every 1 US dollar, you needed N1,654.09 of Nigerian money at the official money exchange place. This is more than it was the day before when you needed N1,653.02 for the same 1 US dollar.
Even though Nigeria has more dollars saved—$40.2 billion in October 2024 compared to $38.4 billion in September 2024—the Naira is still losing value this year. Olayemi Cardoso from Nigeria’s Central Bank told this to some business people in Washington, DC.
Wale Edun, Nigeria’s finance minister, explained that the government is now letting the money market set the exchange rate for the Naira instead of using lots of money to keep it from changing. He said, “The main reason we’re gaining more dollars in reserve is because we’re not spending billions to protect the Naira anymore.” He mentioned it costs a billion dollars every month to try and keep the Naira strong, so now they’re trying something different by not getting too involved.
The US Dollar is Stronger than Ever
The US dollar is winning a lot, having 16 wins in just 18 days! It’s getting stronger for the fourth week in a row because of good news about the US economy. This has made the interest rates, which the US government pays on borrowing money, go higher. This month, the US 10-year loan interest went up by about 40 points, reaching 4.24%, which is near the highest it’s been in three months.
The US dollar index, a tool for seeing how strong the dollar is against other big currencies, went up to 104.43 points. And even reached 104.57 points, which hasn’t been seen since July 30. A new government report says not much has changed in the economy recently, but more people have been getting jobs. Many expect the US Federal Reserve will cut interest rates by a small amount soon, a 25-point cut is seen as very likely.
People were thinking the rates would be cut more, like by 50 points, but now they think a 25-point cut is more likely at 89%. Only 11% believe there will be no change.
The upcoming US presidential election is also mixing up the money world. Some think if former President Donald Trump wins, it might lead to policy changes like tariffs, which could change the value of money.