Saturday, 11 May 2024 04:49

Naira plummets to become world's worst-performing currency

Rate this item
(0 votes)

In a stunning reversal of fortune, Nigeria's naira has plummeted to claim the unenviable title of the world's worst-performing currency in the past month, according to a recent Bloomberg report. This development heaps pressure on the Central Bank of Nigeria (CBN) to consider further interest rate hikes.

With the naira depreciating to 1,466.31 against the dollar, hitting its weakest level since March 20, the report underscores the critical need for action. The scarcity of the US dollar locally exacerbates the situation, with Thursday's supply dwindling to a mere $84 million, half of the previous day's allocation.

Earlier accolades lauding the naira's performance by CBN governor, Yemi Cardoso, have now been overshadowed by these recent challenges. Despite Cardoso attributing the naira's previous success to market reforms and positive sentiments from international investors, the current downturn raises concerns about sustained stability.

Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered, anticipates a further strain on the market as $1.3 billion in naira futures mature by month-end, potentially fueling increased demand for dollars. This looming scenario underscores the volatile nature of the Naira.

The CBN faces mounting pressure to take decisive action following its upcoming policy meeting on May 21, with possibility for additional rate hikes echoing previous increases in February and March totaling 600 basis points. These hikes had initially bolstered the naira's value, offering respite to investors seeking higher returns.

The naira's vulnerability extends beyond official markets, with informal exchanges also witnessing a decline to 1,468 naira against the dollar on Friday.

Abubakar Muhammed, CEO of Forward Marketing Bureau de Change Ltd., attributes this trend to heightened demand from individuals and small businesses, indicating broader economic uncertainties.

Notably, Nigeria isn't alone in grappling with currency woes. Zambia's kwacha hit a record low, while Ghana's cedi weakened to its lowest level since 2022, both countries navigating complex debt restructuring processes. Ayodele Salami, Chief Investment Officer for UK-based Emerging Markets Investment Management Ltd., highlights the impact of debt negotiations on investor confidence across Africa.

Amidst these challenges, the naira and other African currencies face mounting pressure from domestic demand for dollars, particularly for raw material imports, including oil. These multifaceted factors underscore the urgent need for strategic interventions to stabilize Nigeria's currency and restore confidence in its economic outlook.

March 15, 2025

Dangote Refinery further reduces petrol loading price amidst fresh crude supply from NNPCL

In a significant development in Nigeria's downstream oil sector, the Dangote Petroleum Refinery has further…
March 14, 2025

I know individuals in Tinubu’s govt who bought ministerial positions, El-Rufai claims

Former Kaduna State governor, Nasir El-Rufai, has revealed that he knows individuals who paid to…
March 14, 2025

How leaders train themselves to rethink and adapt faster

Paola Cecchi-Dimeglio Recognizing the value of rethinking is one thing—making it a habit is another.…
March 01, 2025

Man offers to split $525,000 jackpot with thieves who stole his credit card to buy…

A Frenchman appealed to the homeless thieves who stole his credit card to buy a…
March 14, 2025

Gunmen invade Kaduna communities, abduct 10

Suspected bandits have abducted ten villagers from three remote communities in Kajuru Local Government Area…
March 15, 2025

What to know after Day 1115 of Russia-Ukraine war

RUSSIAN PERSPECTIVE Putin urges Kiev to order troops in Kursk Region to surrender Moscow is…
March 15, 2025

Humanoid robot with human-like competence unveiled in China

Du Qiongfang Humanoid robot manufacturer AgiBot in Shanghai unveiled on Tuesday its latest humanoid robot…
January 08, 2025

NFF appoints new Super Eagles head coach

The Nigeria Football Federation (NFF) has appointed Éric Sékou Chelle as the new Head Coach…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2025 NewsScroll. All rights reserved.