Naira Weakens 0.2% to 1,510/$, Becomes Worst-Performing Currency in First Half of 2024


Nigeria’s Naira Continues Downward Spiral, Among Worst Performers Globally

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The Nigerian naira extended its decline against the dollar for a ninth consecutive day, marking it as the worst-performing currency in the first half of the year. Faced with steep devaluation, limited dollar liquidity, and market volatility, efforts to stabilize the currency have been challenged.

Closing at 1,510 naira per dollar on Thursday, according to FMDQ data compiled by Bloomberg, the naira has experienced its longest losing streak since July 2017, with a cumulative decline of 40% since the beginning of the year.

Among global currencies tracked by Bloomberg, the naira’s performance ranks alongside that of Lebanon’s pound, which is grappling with an economic crisis and increasing dollarization.

Samir Gadio, head of Africa strategy at Standard Chartered Bank Plc in London, emphasized that while the naira has undergone significant devaluation and is undervalued, sustained improvement in dollar supply is essential to support the currency. Despite attractive local interest rates, portfolio inflows have not yet shown substantial recovery.

Nigeria’s foreign exchange challenges stem from years of acute scarcity and instability exacerbated by lower crude oil production and limited economic diversification. Since June 2023, when President Bola Tinubu’s administration initiated policy changes to attract inflows and revive the economy, the naira has lost approximately 70% of its value against the dollar.

Recent volatility in the currency market eased in June, following earlier fluctuations driven by imbalances between dollar demand and supply. Central Bank Governor Olayemi Cardoso indicated optimism this week, suggesting that the era of significant volatility may be over, as efforts to enhance investor confidence continue.

Under Cardoso’s leadership since September, the central bank has aggressively raised interest rates by 750 basis points to 26.25%, cleared a backlog of foreign exchange transactions, and secured multilateral dollar inflows aimed at stabilizing the currency.

Alongside Nigeria’s naira, Egypt’s pound and Ghana’s cedi also ranked among the worst-performing currencies globally in the first half of the year. Looking ahead, Gadio highlighted the importance of sustained foreign exchange inflows for the naira’s stabilization and potential appreciation.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247news
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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