Naira Gets New Rating Among World Currencies in 2024, Depreciates in Official And Parallel Markets
- The Nigerian currency has become the worst-performing currency in the world in 2024
- A Bloomberg report tracked data from the FMDQ Exchange and showed that the naira depreciated for nine straight days
- The report stated that apart from the naira, Egypt's pound and Ghana's cedi were among the world's worst performers
Legit.ng's Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
The Nigerian naira emerged as the worst-performing currency in the world in the first half of 2024.
A report by Bloomberg on Friday, June 28, 2024, said devaluation, insufficient dollar liquidity, and market volatility have halted the Central Bank of Nigeria (CBN) 's efforts to boost the Nigerian currency.
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The naira depreciates for 9 days in a row
Apart from the naira, Egypt's pound and Ghana's cedi were rated as the worst performers in the year's first six months.
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The Bloomberg report tracked data from FMDQ and disclosed that the naira depreciated for nine days to N1.510 per dollar by the close of business on Thursday, June 27, 2024.
The report said:
"The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.
"The naira's performance is the worst among global currencies tracked by Bloomberg beside that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation."
Experts blame slow inflows as a reason
Experts say the dollar supply needs to improve to boost the Nigerian currency. They also state that portfolio inflows have yet to pick up despite attractive rates.
According to them, the country should improve FX inflows to enhance the naira's fortunes.
Kelechi Mgboji, an economist and financial analyst, says that the CBN's efforts to improve liquidity have not yielded sufficient results because of the yawning gap between supply and demand.
"There is an improvement in forex supplies but the demand is still high, causing volatility in the system. What the CBN should do is continue its intervention and maintain a managed float of the local currency as there is nowhere is an absolute float," he said.
PwC reported that the naira depreciated against the US dollar by 67.8%, from an average of N461.1 in May 2023 to N1,433.83 in May 2024.
The naira emerged as the world's best-performing currency, which later reversed the following month.
The naira depreciates despite Cardoso's promises
Bloomberg reported that that the naira was volatile between mid-April and May because of the imbalance between demand and supply for the dollar before the trend thawed in June on improved dollar inflows.
Legit.ng reported that the CBN Governor, Olayemi Cardoso, stated that the naira's worst days are over following improved diaspora remittances and enhanced inflows.
Meanwhile, the Nigerian currency depreciated marginally on Friday, June 28, 2024, to trade at N1,505.30 per dollar as against the N1,500 it traded on Thursday, June 27, 2024, representing 0.32% depreciation.
Traders quoted the naira at an intra-day high of N1,540 per dollar and a low of N1430 amid a forex turnover of $187.82 million.
Naira depreciates against against US dollar
Legit.ng earlier reported that the Nigerian currency, the naira, is ending the month of June 2024 the same way it started, with consecutive depreciation in the official and unofficial foreign exchange markets.
In the official market, data from FMDQ securities showed that at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira closed at N1,507.83 on Wednesday, June 24.
The rate on Wednesday indicates a 0.46% or N7.04 loss when compared to Tuesday's closing price of N1,500.79/$1.
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Source: Legit.ng
