Nigerian naira ranked worst performing currency in first half 2024
TLDR
- Nigeria's naira weakens for ninth straight day against the dollar, named worst-performing currency in H1 due to devaluation and volatility.
- Naira closes at 1,510 per dollar, facing longest losing streak since July 2017, with total depreciation of 40% in 2021.
- Naira's performance ranks worst among global currencies tracked by Bloomberg, second only to the Lebanese pound facing economic crisis.
Nigeria’s naira weakened for the ninth consecutive day against the dollar, marking it as the worst-performing currency in the first half of the year due to a steep devaluation, insufficient dollar liquidity, and market volatility.
By the close on Thursday, the naira had weakened by 0.2% to 1,510 per dollar, according to FMDQ data compiled by Bloomberg. This decline represents the longest losing streak since July 2017 and brings the total depreciation to 40% since the beginning of the year.
Among global currencies tracked by Bloomberg, the naira's performance is the worst, except for the Lebanese pound, which is facing an economic crisis and widespread dollarization. Besides the naira, Egypt’s pound and Ghana’s cedi were the world’s other worst performers in the first six months of the year.
Key Takeaways
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, the local currency has lost about 70% of its value against the dollar following policy changes introduced by President Bola Tinubu's government to attract inflows and revive the economy. The naira experienced significant volatility between mid-April and May due to an imbalance between dollar demand and supply, but fluctuations eased in June as dollar inflows improved. Central Bank believes the currency's volatility may be over and is committed to promoting investor confidence. Since taking office in September, Governor Olayemi Cardoso has raised interest rates by 750 basis points to 26.25%, cleared a foreign exchange backlog, and negotiated multilateral dollar inflows to help stabilize the currency.
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