Naira to Dollar Faces Bleak Outlook as Bloomberg Predicts Worst Year Since 1999.
In a recent report by Bloomberg, Nigeria’s currency, the Naira, is set to endure its most challenging year since the return to democracy in 1999, with analysts foreseeing continued depreciation in 2024.
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The Naira witnessed a staggering 55% decline in 2023, reaching 1,043 per dollar as of Thursday, making it the world’s worst-performing currency among 151 tracked, following the Lebanese pound and Argentine peso.
The depreciation trend began after the Central Bank of Nigeria allowed the Naira to trade more freely in June, coupled with President Bola Tinubu’s decision to scrap costly petrol subsidies.
Dollar to Naira Black Market exchange rate today; December 29, 2023 | Aboki dollar rate
Bloomberg highlighted that Nigeria’s foreign reserves are currently at their lowest in six years, burdened by overdue short-term overseas obligations. Vetiva Capital Management Ltd predicts further Naira depreciation unless international investors are attracted or oil output is increased under Tinubu’s administration.
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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,” Vetiva Capital stated in a note to clients.
