Naira Now Worst Performing Currency in the World, Expert Speaks on Next Rate

• A new report has revealed that the Naira is currently the worst-performing currencies in the world
• The Naira found itself ranked among the worst-performing currencies alongside the Zambian and Ghanaian currencies
• In recent days, the Naira has been in free fall in both the official and unofficial foreign exchange markets

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Nigerian currency, the naira has been ranked the worst-performing currencies in the world following a massive depreciation in the official and black markets.

According to Bloomberg, naira has experienced a reversal in its recent gains to emerge the worst-performing currency.

Legit.ng reports that naira depreciated to as low as N1,490 against the dollar on Friday, May 10, 2024 against the dollar, on if its weakest exchange rate level since March.

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Official and parallel markets near convergence as naira hits N1,500 per dollar

This decline has been attributed to the local scarcity of the US currency, with only $84 million available on Thursday, half of the previous day’s supply.

Naira fall will continue

Bloomberg report noted that that the decline in the naira’s performance is expected to intensify pressure on the CBN to implement another rate hike after its upcoming policy meeting on May 21.

Razia Khan, the Chief Economist for Africa and the Middle East at Standard Chartered, quoted by Bloomberg noted that the naira fall is likely to continue.

Khan explained that an estimated $1.3 billion in naira futures will mature at the end of this month, potentially dampening market sentiment.

Her words:

The expectation is that this will create more demand for dollars. When the currency appreciated very fast, there had been a bout of profit-taking by offshore investors, and this meant that the dollar-naira exchange rate backed up again.

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Boost for the naira as foreign reserves gain $262 million, highest in three weeks

“This is completely in line with the functioning market."

Other worst performing currencies

In the report, two other African countries currencies Zambian kwacha and Ghana’s cedi where mentioned as one of the four worst-performing currencies in the last month.

Punch reports that the Zambian kwacha hit a record low of 27.3969 per dollar.

While, Ghana’s cedi weakened to 13.99 against the dollar on the same day, marking its lowest level since 2022.

FG addresses the Naira the dollar exchange rate

Legit.ng earlier reported that Ben Akabueze, the director-general of the federation's budget office, said the Naira would strengthen in value in the foreign exchange market in 2024.

Speaking in an interview, Akabueze said this would be possible as the country expects an increase in dollar supply.

He noted that the Tinubu-led government expects the reforms initiated to start yielding results in 2024, which is why it maintains a positive stance on the exchange rate.

Source: Legit.ng