The Naira faced a significant decline of more than 40 percent during the first half of 2024 in the foreign exchange market. According to FMDQ data, the Naira’s value weakened to N1505.30 per dollar on Friday, a sharp contrast from its closing range of N896.6 to N907.11 on December 29, 2023.
This decline highlights ongoing instability that the Naira has experienced against various currencies over recent months, following a period of several months where it had appreciated before beginning to depreciate in mid-April 2024.
In February 2024, the Naira reached its peak at N1,665.50, but by April, it had plummeted to its lowest points of N1,140 and N1,230.61 at the official and parallel foreign exchange markets, respectively.
These fluctuations coincide with policy actions by the Central Bank of Nigeria, which aimed to unify the FX market and issued directives affecting International Money Transfer Operators, Bureau De Change operators, and regulations concerning excess FX to banks. Recently, the Price Verification System Portal for importers was also withdrawn.
Despite these reforms, the Naira continues to experience volatility against the Dollar and other currencies in the foreign exchange market.
In April 2024, the Naira was recognized as the best-performing currency, but this status swiftly reversed in May, according to Bloomberg’s assessments. As of Friday, the Naira closed at N1505.30 and N1515 at the official and parallel foreign exchange markets, respectively.
These developments occur alongside an increase in Nigeria’s external reserves, which reached $34.07 billion as of June 26, 2024.
