Despite the intervention of the Central Bank of Nigeria,CBN in shoring up the naira, the Nigerian currency has been listed among the worst-performing currencies in sub-Saharan Africa in 2024 by the World Bank.
The naira was listed alongside the Ethiopian birr and South Sudanese pound as some of the worst-performing currencies in the world.
The CBN on August 16 sold foreign exchange (FX) to end users through a Retail Dutch Auction System (rDAS) to reduce the demand pressure on the market, and promote price discovery.
The apex bank further disclosed that a total bid valued at $1.18 billion was received from 32 Authorised Dealers Banks (ADBs), of which $876.26 million from 26 banks qualified at a cut-off rate of N1495/$.
Despite this intervention, the international lender in its recently released regional economic outlook report ‘Africa’s Pulse’ listed the naira amongst worst performing currencies.
“By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region, ” the report stated.
The World Bank revealed that the naira has lost 43% of its value at the end of August.
According to the Bretton Wood institution, limited dollar inflows, and slow foreign exchange (FX) disbursements to bureaus de change (BDC) operators by the CBN weakened the naira.
“The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of end-August.
“Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira,”‘ the report added.
By: Babajide Okeowo
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Last modified: October 16, 2024
