Naira Declared World's Worst Performing Currency in First Half of 2024

In a stark revelation for economic analysts and policymakers alike, Nigeria's naira has earned the dubious distinction of being the worst-performing currency globally during the initial half of 2024. According to a detailed analysis by Bloomberg, several factors including devaluation, inadequate dollar liquidity, and heightened market volatility have collectively thwarted efforts by the Central Bank of Nigeria to stabilize the currency.

The naira's depreciation has been relentless, marking a concerning nine consecutive days of decline, ultimately settling at 1,510 per dollar as of the close of trading on Thursday. This sustained downturn represents the most extended losing streak since July 2017, with an overall depreciation of 40% since the beginning of the year. Bloomberg's tracking data underscores that alongside Lebanon's pound, currently mired in a severe economic crisis and dollarization, the naira stands out as one of the worst performers among global currencies.

Samir Gadio, Head of Africa Strategy at Standard Chartered Bank Plc, weighed in on the situation, acknowledging that while the naira has experienced considerable devaluation to reach a potentially undervalued state, the critical deficiency remains the insufficient supply of dollars necessary to bolster the currency's stability.

Factors Contributing to the Naira's Decline

Devaluation: Continuous devaluation of the naira against major currencies has eroded its value significantly, reflecting broader economic uncertainties.

Dollar Liquidity Crisis: The scarcity of dollars in the Nigerian market has severely restricted the Central Bank's ability to intervene effectively, exacerbating the currency's volatility.

Market Volatility: Heightened market instability has further fueled speculations and pressured the naira downwards, compounding its woes.

Comparative Analysis with Other Currencies

Egypt's pound and Ghana's cedi, alongside the naira, emerged as the world's poorest performing currencies in the first half of 2024. This shared struggle among African currencies underscores broader regional economic challenges and the vulnerability of local economies to external shocks.

Outlook and Potential Remedial Measures

Looking forward, analysts and stakeholders are keenly watching developments surrounding the naira. The imperative lies in enhancing dollar liquidity through strategic policies and measures that can restore investor confidence and stabilize the currency. Addressing underlying economic fundamentals and boosting productive capacity are also seen as crucial steps towards ensuring sustainable recovery and growth.

In conclusion, while the naira's current plight is dire, proactive measures and decisive policy actions could potentially reverse its fortunes in the coming months. However, navigating these turbulent economic waters will require concerted efforts and coordinated strategies from Nigeria's financial authorities and policymakers.

This comprehensive assessment highlights the complex interplay of factors influencing currency performance and underscores the urgency of addressing systemic weaknesses to foster economic resilience and stability in Nigeria.

Original article:

Naira Is Officially The World's Worst Performing Currency In The First Half Of 2024 | #Politicsnigeria

The naira has emerged as the worst-performing currency in the world in the first half of 2024.

According to a report by Bloomberg on Friday, devaluation, insufficient dollar liquidity, and market volatility have hindered efforts by the Central Bank of Nigeria to strengthen the currency.

Besides the naira, Egypt’s pound and Ghana’s cedi were the world’s other worst performers in the first six months of the year.

Tracking data from FMDQ, Bloomberg said that the naira weakened for a ninth straight day to 1,510 per dollar by the close on Thursday.

“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.

“The naira’s performance is the worst among global currencies tracked by Bloomberg beside that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation,” the report noted.

Providing an update on the currency, the Head of Africa Strategy at Standard Chartered Bank Plc, Samir Gadio, in a mail said, “While the naira is undervalued and has seen significant adjustment. The supply of dollars needs to improve for the currency to be supported.

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