This is according to a report released by Bloomberg on Friday, June 28, 2024.
Other currencies that recorded poor performances in the first six months of the year, besides the naira, include Egypt’s pound and Ghana’s cedi.
It weakened by 0.2% to 1,510 per dollar by the close on Thursday, according to FMDQ data. This losing streak is the longest since July 2017, bringing the decline since the start of the year to 40%.
The naira’s performance is the worst among global currencies tracked by Bloomberg besides that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarization.
“While the naira is undervalued and has seen significant adjustment, the supply of dollars needs to improve for the currency to be supported,” Samir Gadio, head of Africa strategy at Standard Chartered Bank Plc in London, said by email. “Portfolio inflows have yet to pick up, even amid still-attractive local rates.”
Nigeria has faced years of acute foreign exchange scarcity and instability due to lower crude production and a lack of economic diversification.
Since June 2023, when President Bola Tinubu’s government introduced policy changes to attract inflows and revive the economy, the local unit has lost about 70% of its value against the dollar.
The currency experienced volatility between mid-April and May due to the imbalance between demand and supply for the greenback. However, the swings moderated in June with an improvement in dollar inflows.
Central Bank Governor Olayemi Cardoso stated this week that the lender believes the currency’s volatility may be a thing of the past and is committed to promoting investor confidence.
Since assuming office in September, he has increased interest rates by 750 basis points to 26.25%, cleared a foreign exchange backlog, and negotiated multilateral dollar inflows to help stabilize the currency.
