Naira Drops to 702/$, With a Potential New FX Supply from CBN.

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The Central Bank of Nigeria has permitted a free float of the naira against the dollar and other world currencies, and as of the close of business on Thursday, it was trading at a rate of 702.19/dollar. From the N664.04/dollar reported at the end of business on Wednesday, the currency lost about 5% of its value in a 24-hour period.

According to currency dealers in Kano, Abuja, and Lagos, the naira closed flat at 757 to the dollar on Thursday on the parallel market.

Yemi Kale, a partner and chief economist at KPMG Nigeria, predicted in a research that the removal of the country’s gasoline subsidy and the unification of its exchange rate by the federal government would cause inflation to soar in June and July 2023, as an immediate consequence of both policies.

Items such as cars, electronics and imported food would be higher which might lead to higher inflation.”

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