Naira Tops List of Worst-Performing Currencies in Africa in 2023, Tumbles to Lowest in History
- The Nigerian currency has been listed among Africa’s worst-performing in 2023
- The naira fell by 55% in the past year, exchanging above N1,000 per dollar, its lowest in history
- Other African currencies listed as worst-performing are the Kenyan shilling and the Angolan kwanza
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Nigerian currency has been listed among the worst-performing currencies in Africa in 2023, depreciating by 55% in the last 12 months.
Naira’s woes follow a foreign exchange reform embarked upon by the Nigerian government on June 14, 2023, when the Central Bank of Nigeria (CBN) announced the free float of the currency.
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Tinubu's policy crashes the naira's value by 55%
The policy set the Nigerian currency on a free-fall against the US dollar, leading to a massive fall in value.
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The local currency closed 2o23 at N906 per dollar, one the lowest in a year that has seen it battered by a lack of forex liquidity, which experts blamed on FX backlogs plaguing the economy.
As of Wednesday, January 3, 2024, the naira depreciated again to its lowest at N1,035.12 per dollar, crashing any hope of rapid recovery, a Legit.ng report said.
Since the announcement, the naira has fluctuated in official and parallel markets, where traders jostle for a few US greenbacks.
Analysts predict further crash of the naira
Economic analysts believe the naira’s problems began when the Nigerian government stopped its forex interventions in the official market.
Joyce Ibeh, a stockbroker and an economist, said that the present government could have foreseen the issues now facing the naira.
She said that without enough forex earnings through export, the Nigerian currency stands no chance against major currencies worldwide.
“How do you even expect the naira to compete? There is nothing to act as a buffer against major shocks. Our reserves are grossly depleted, and the country is earning nothing regarding forex. So, the naira stands no chance against any major currency,” she said.
Kenyan Shilling tumbles to an all-time low
According to Bloomberg, the Naira and Kenyan shilling are among the continent’s worst-performing currencies.
The report said Kenya increased its benchmark interest rate on December 5, 2023, since the new Governor, Kamau Thugge, assumed office in June last year.
The worst-performing currencies in Africa in 2023
- Nigerian Naira
- Angolan Kwanza
- Malawian Kwacha
- Zambian Kwacha
- Burundi Franc
- Congolese Franc
- Kenyan Shilling
Naira disappoints FG’s N700 per dollar projection, crashes on first trading day in 2024
Legit.ng reported that the Nigerian naira began the New Year very poorly, crashing by 8.9% against the US dollar on Tuesday, January 2, 2024.
The naira closed at N988.46 per dollar despite a $2.5 billion from Afrexim Bank injected into the economy to cushion the forex shortage in the country.
Naira’s fall follows the disbursement of part of the $3.3 billion forex exchange support facility to the Nigerian government.
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Source: Legit.ng
