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A Bloomberg study published on Friday, June 28th, stated that during the first half of 2024, the Naira, the currency of Nigeria, has underperformed all other currencies worldwide.
According to a Bloomberg analysis, the Central Bank of Nigeria’s attempts to fortify the Naira have been impeded by devaluation, a lack of dollar liquidity, and market volatility.
The pound from Egypt and the cedi from Ghana have both been among the worst-performing currencies.
According to data from FMDQ, which Bloomberg published, the Naira depreciated for the ninth day in a row, hitting ₦1,510 per dollar on Thursday, June 27.
This ongoing reduction is a 40% decrease from the start of 2024 and is the longest since July 2017.
The Naira lost 67.8 percent of its value against the US dollar, from an average of ₦461.1 in May 2023 to ₦1,433.80 in May 2024, according to PwC’s most recent economic report on Nigeria.
PwC pointed out that the Central Bank of Nigeria’s changes to the foreign currency market, which were intended to promote price discovery and draw in market liquidity, did not stop this devaluation.
The Naira temporarily held the top spot in terms of performance among all currencies in March 2024, but the position was reverted the following month. Bloomberg noted that the imbalance in supply and demand for the dollar caused the Naira to fluctuate between mid-April and May, with some stability observed in June as a result, the influx of dollars increased.
According to Olayemi Cardoso, the governor of the Central Bank of Nigeria, the worst of the Naira’s volatility may be behind us. According to Bloomberg’s compilation of FMDQ data, the naira’s trading range in June was relatively narrow, ranging between ₦1,473/$ to ₦1,485/$. As a consequence, the currency’s 10-day rolling volatility dropped to its lowest level in a year, and its 100-day fluctuations were the lowest since November 2023.
