Financial software company, Bloomberg, has rated Nigeria’s currency, Naira, among the world’s worst performing currencies in 2023.
Bloomberg, in its latest report said the currency is poised for its worst year since the return to democracy in 1999, with analysts predicting further depreciation in 2024.
Meanwhile as at Thursday, the Naira reached an all-time low as it depreciated to N1,043.09 per US dollar in the official market just a few days to the New Year.
It noted that the Naira plunged 55 per cent this year to 1,043 per dollar, making it the world’s worst performer after the Lebanese pound and the Argentine peso among 151 currencies tracked.
The report, however, said the depreciation started after the Central Bank of Nigeria (CBN) allowed the currency to trade more freely in June, and President Bola Tinubu scrapped costly petrol subsidies.
READ ALSO: Yuletide Free Ride: We Conveyed 63,000 Passengers In Two Days – NRC
It added that Nigeria’s foreign reserves are at the lowest in six years with most of them encumbered by overdue short-term overseas obligations.
Bloomberg quoted a forecast by Vetiva Capital Management Limited suggesting that the currency may slip further unless the Tinubu-led federal government lures international investors or ramps up oil output.
Vetiva Capital said: “It’s clear that further devaluation — alongside tighter monetary policy — is needed to reduce imbalances in the FX market.
“A significant rise in external reserves, material increase in foreign exchange inflows, and reduction in money supply, will be positive for the Naira.”
