The 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 Federal Government’s plan to adopt 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 per cent 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 per cent points higher than the rate recorded in April 2020 at 12.34 percent. On month-on-month basis, the Headline index increased by 1.17 per cent in May 2020, this is 0.15 per cent rate higher than the rate recorded in April 2020 at 1.02 per cent.
This was despite the sustained upward pressure on consumer prices as headline inflation rose 1.2 per cent month-on-month from one per cent, the highest since June 2018. Notably, core inflation rose faster by 14 basis points to 10.1 per cent year-on-year from 10 per cent in April 2020, the highest since July 2018.
However, core inflation increased five basis points, slower at 0.9 per cent on a month-on-month basis, the first moderation since February 2020. Meanwhile, food inflation was little changed at 15.04 per cent year-on-year from 15.03 per cent in the previous month.