US Dollar Rises Near Two-Month High, Impacting Nigeria

On September 29, the US dollar traded near a two-month high, influenced by rising oil prices and American bond yields, which added uncertainty for Nigerian businesses budgeting for imports and foreign-currency payments. The dollar index was reported at 101.27, indicating a 1.8% gain for September, marking its strongest monthly performance since June.

Nigerian importers are particularly concerned about the naira cost of acquiring dollars for invoices, as a weakening naira can increase local-currency bills even if the dollar price remains unchanged. This situation follows the Nigerian central bank's recent decision to reduce its benchmark interest rate from 26.5% to 23%.

However, commercial lending rates had not adjusted immediately, as banks were still evaluating funding costs and loan pricing, according to reporting by Nairametrics on September 28.