The World Bank in its regional economic outlook report ‘Africa’s Pulses listed naira among the worst-performing currencies in sub-Saharan Africa in 2024.
World Bank said the naira continued to lose value, with a year-to-date depreciation of about 43 percent as of August.
According to the World Bank, limited dollar inflows, and slow foreign exchange (FX) disbursements to bureaus de change (BDC) operators by the Central Bank of Nigeria (CBN) weakened the naira.
The international lender also said the demand for dollars, driven by financial institutions, non-financial end-users, and money managers, has exacerbated the pressure on the currency.
“By August 2024, the Ethiopian birr, Nigerian currency, and South Sudanese pound were among the worst performers in the region,” the World Bank said.
“The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of end-August.
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“Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira.”
The report also notes that the naira’s depreciation has contributed to higher domestic prices, particularly for imported goods, compounding the difficulties for Nigerian consumers.
According to FMDQ Exchange, a platform that oversees the official window, the naira closed at N1,658/$ at the official market on October 15.
Also, the Bretton Woods institution said African currencies such as the Kenyan shilling and South African rand, which weakened in 2023, stabilised or strengthened this year.
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