By John Ikani
The Nigerian naira has suffered a decline of more than 40 percent against the dollar this year, making it the worst-performing African currency.
The drop comes as the country takes robust measures to address its financial situation.
The measures involve the removal of fuel subsidies and reforms to the exchange system, actions that have faced widespread criticism.
Following the naira’s decline is the Angola Kwanza, which has experienced a 39.5 percent decrease against the US dollar Year-to-Date (YTD).
The Egyptian Pound has also seen a drop of 20.6 percent, the Congolese Franc has a decrease of 18.9 percent, the Liberian Dollar has a decrease of 18.6 percent, the Kenya Shilling has a decrease of 15.7 percent, Sierra Leone’s Leone has a decrease of 13.8 percent, the Ghanaian Cedi has a decrease of 11.9 percent, the Rwanda Franc has a decrease of 11.6 percent, and the South African Rand has a decrease of 9.6 percent.
Around mid-August, the Naira was quoted as low as N955/$, raising concerns among investors about a potential decline to N1000/$.
Ever since the introduction of the Naira float after an announcement by the FG/CBN, the Naira has been experiencing a steady fall. Within a mere 10 weeks of its implementation, it lost almost half its value against the US dollar.
To stabilize the naira and combat inflation, the Central Bank of Nigeria (CBN) has rolled out several measures. These measures encompass an increase in banks’ cash reserve ratio (CRR), the initiation of market operations (OMO), and a modification of the exchange rate system.
In a significant shift in policy on August 17, the central bank responded to pressure from BDC operators. They introduced a series of operational adjustments for the Bureau De Change segment, aiming to boost efficiency and transparency in the Nigerian Foreign Exchange Market.
In spite of these extensive efforts, the Naira’s value continues to weaken against the Dollar.
Market rates posted on the FMDQ website on Wednesday revealed a substantial depreciation of the Naira against the US dollar in the official market.
Starting at N769.66 to $ and closing at N775.34 to $ on Tuesday, the official market rates displayed a 0.42 percent decrease compared to the previous session’s rate of 772.12 naira to the dollar on Monday.
