Naira suffers 40% depreciation in first half of 2024

The Naira depreciated by over 40 percent in the first half of 2024 in the foreign exchange market.

FMDQ data showed that the Naira weakened to ₦1505.30 per dollar on Friday, down from between ₦896.6 and ₦907.11 where it closed on December 29, 2023.

The figures indicate that the Naira has faced continued instability against other currencies in recent months, following a period of appreciation that ended in mid-April 2024.

The Naira peaked at ₦1,665.50 in February 2024 and reached its lowest point in April at ₦1,140 and ₦1,230.61 in the official and parallel foreign exchange markets, respectively.

The depreciation is a result of several policies implemented by the Central Bank of Nigeria (CBN).

These policies include unifying the FX market, regulating International Money Transfer Operators, intervening with Bureau De Change operators, imposing regulations on excess FX to banks, and recently withdrawing the Price Verification System Portal for importers.

Despite these policy reforms, the Naira has continued to fluctuate against the Dollar and other currencies in the foreign exchange market.

According to Bloomberg, the Naira went from being the best-performing currency in April 2024 to the worst-performing in May.

As of Friday, the Naira closed at ₦1505.30 and ₦1515 in the official and parallel foreign exchange markets, respectively.

This depreciation occurred despite an increase in Nigeria’s external reserves, which stood at $34.07 billion as of June 26, 2024.