The Nigerian naira is among the worst-performing currencies in Africa, the World Bank has said.
It noted that the currency weakened by nearly 40 per cent against the US dollar since a mid-June devaluation.
The global bank explained in its report titled, ‘Africa’s Pulse: An analysis of issues shaping Africa’s economic future (October 2023 | Volume 28).’
It stated that, the naira and the Angolan kwanza are among the worst performing currencies in the region: these currencies have posted a year-to-date depreciation of nearly 40 per cent.
The weakening of the naira was triggered by the central bank’s decision to remove trading restrictions on the official market. For the kwanza, it was the decision of the central bank to stop defending the currency as a result of low oil prices and greater debt payments.”
In June 2023, the Central Bank of Nigeria directed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters’ window of the foreign exchange market, and allow the free float of the naira against the dollar and other global currencies. Since then, the naira had fallen from N473.83/$ to around N800/$ officially.