Why naira is set to appreciate against US dollar after US government

• The US Federal Reserve's determination to little involvement rates is acceptable to weakened the United States Dollar
• The determination has provided an accidental for the Nigerian currency to fortify successful the overseas speech market
• Economist says that the US national reserve determination volition besides assistance pull much concern into Nigeria

Legit.ng writer Dave Ibemere has implicit a decennary of concern journalism acquisition with in-depth cognition of the Nigerian economy, stocks, and wide marketplace trends.

Nigerian currency, the naira has been provided lifeline by the US Federal Reserve aft chopped successful its cardinal lending complaint by fractional a percentage-point.

The determination which was taken connected Wednesday, September 17 is the archetypal simplification for much than 4 years.

Naira is expected to amended against US dollar Photo credit: CBN
Source: Getty Images

What does the US Fed reserve chopped means?

The involvement complaint cut, announced by Federal Reserve caput Jerome Powell means little borrowing cost

By lowering borrowing costs, Powell said volition assistance to boost home spending and concern successful skils development.

However, the different broadside of the determination is that the complaint chopped volition weaken the US Dollar connected planetary overseas speech markets.

Good quality for naira

For Nigeria, which has been battling currency depreciation and inflation, the US Fed's determination offers different anticipation of recovery.

Since the commencement of 2024, the naira has mislaid implicit 100% of its worth against the dollar, falling to arsenic debased arsenic N1,658 successful the authoritative market.

The Central Bank of Nigeria is having its Monetary Policy Meeting(MPC) on Monday September 23 and Tuesday September 24.

The determination taken volition apt impact however overmuch summation Nigeria tin maximise from the US Fed involvement complaint cut.

A weaker dollar could little the outgo of imports and trim unit connected Nigeria's overseas reserves.

Chinedu Okafor, a Lagos-based economist expressed optimism of brighter days up for naira.

He said:

"This is an accidental for the naira to fortify its presumption and autumn beneath N1,600 to a dollar."A weaker dollar is bully news, arsenic it volition assistance little the outgo of imported goods, which could easiness inflationary pressures, fixed that Nigeria is mostly an import-dependent country."

New platforms identified arsenic threats to naira

Earlier, Legit.ng reported that Nigerians identified the emergence of 2 cryptocurrency platforms arsenic the crushed for the recent autumn of the naira.

The earlier diminution of the naira was attributed to alleged marketplace manipulation by Binance.

Nigerians person blamed the latest depreciation connected caller crypto speech platforms, namely BYBIT and BITGET.

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Source: Legit.ng