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The naira fell to an all-time low on the interbank foreign exchange market on Wednesday a day after the Central Bank of Nigeria raised its benchmark interest rates to curb inflation.

The currency fell to N334.5 against the dollar as at 12.41pm, down 5.8 percent from the previous day’s close, following the CBN decision and due to dollar shortages. About $10 million was traded at the new rate on Wednesday.

“If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles ... I don't think we will see large inflows until the fundamentals of the economy improves," one trader told Reuters.

On Tuesday, the Central Bank of Nigeria raised its benchmark interest rate by 200 basis points from 12 percent to 14 in order to curb inflation, encourage savings, stabilize the naira, and lure foreign investors back to the country’s economy.

The CBN’s monetary policy decision came a week after the National Bureau of Statistics reported that Nigeria’s consumer price index rose to 16.5 percent in June, the highest rate recorded since October 2005.

“The Committee noted that inflation had risen significantly, eroding real purchasing power of fixed income earners and dragging growth,” Godwin Emefiele, the CBN governor, said in a press conference in Abuja on Tuesday. “While the situation called for obvious tightening of the monetary policy stance, the technical recession confronting the economy and the prospects of negative growth to year-end needed to be factored into the policy parameters.”

Last month, the CBN floated the naira on the interbank forex market after abandoning its currency peg of N197 per dollar. Since trading commenced, the apex bank has been the main provider of dollar liquidity, selling over $4 billion in forwards contracts.