The naira has become the poorest-performing currency globally for the first half of 2024, as per a Bloomberg report on Friday. Factors such as devaluation, dollar scarcity, and market instability have thwarted the Central Bank of Nigeria’s efforts to bolster the currency. Alongside the naira, Egypt’s pound and Ghana’s cedi were also among the weakest performers during this period.
Tracking FMDQ data, Bloomberg reported that the naira depreciated for the ninth consecutive day, closing at 1,510 per dollar on Thursday. This marks its longest losing streak since July 2017, leading to a 40 percent decline since the year’s start. The naira’s fall is only surpassed by Lebanon’s pound, amidst its economic turmoil and dollarisation.
Samir Gadio, Head of Africa Strategy at Standard Chartered Bank, noted that while the naira is significantly undervalued and has seen major adjustments, an increase in dollar supply is crucial for its support. Despite attractive local rates, portfolio inflows remain sluggish.
PwC’s latest report highlights a 67.8 percent depreciation of the naira against the dollar from May 2023 to May 2024, despite the CBN’s forex market reforms. After a volatile period between mid-April and May, the naira’s fluctuations have lessened, with CBN Governor Olayemi Cardoso suggesting the worst may be over. This month, the naira has traded between 1,473/$ and 1,485/$, achieving its lowest volatility in a year.
