Business
BREAKING: Nigeria’s Naira Weakens, Becomes Worst-Performing Currency In The World
Naira severed ties with the pounds as Nigeria launched a new currency which would still hold five decades later. The Nigerian naira, like other currencies, has been redesigned to possibly enhance more values.
The Nigeria’s naira has become the worst performing currency in the world, which is a dramatic reversal of its gains in mid-April.
Naira clinched the title in the first half of 2024 as it weakened for a ninth straight day against the dollar.
The currency did not fair well in the first half of the year as an upward devaluation, insufficient dollar liquidity and market volatility hindered efforts by the Central Bank of Nigeria to strengthen the currency.
Bloomberg reports that “it has weakened 0.2% to 1,510 per dollar by the close on Thursday, FMDQ data compiled by Bloomberg show.
“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40%.
PricewaterhouseCoopers Limited (PwC) had said that the naira plummeted against the dollar by 67.8% from an average of ₦461.1 in May 2023 to ₦1,433.80 in May 2024.
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“The depreciation took effect despite foreign exchange market reforms by CBN to achieve price discovery and attract liquidity to the market,” PwC stated.
Recall that on January 1, 1973, Nigeria birthed a new legal tender called naira.
Naira severed ties with the pounds as Nigeria launched a new currency which would still hold five decades later. The Nigerian naira, like other currencies, has been redesigned to possibly enhance more values.
Bloomberg also projected that, with the upward swing of the naira in the foreign exchange market at the time, the currency may exchange below ₦1,000 per dollar in the coming months. Adding that the naira would appreciate to ₦1,200 per dollar within the next 12 months.
It is obvious that the impact of this depreciation is being felt across Nigeria.
Many businesses across the country are struggling to survive or thrive.
There is also the rising import costs and the consumers across the country are persistently faced with higher prices for everyday goods.
Additionally, as the Naira weakens, the foreign investors are discouraged and multinationals exits the country en mass which hinders economic growth, leading to loss of jobs and revenue.