Naira drops by 49% year-to-date, ends 2023 at N907 against US Dollar

The greatest economy in Africa saw its currency, the Naira, drop by a staggering 49% year to date, ending 2023 on Friday at N907.11 per US dollar.

The official exchange rate market, the FMDQ, provides data on the Naira’s appreciation. On Friday, it was trading at N907.11 per US dollar, up from N1,043/$1 on Thursday.

However, since the beginning of the year at N461.5/$1, the exchange rate has decreased by 49% year to date.

The market turnover for the year under review was $26.8 billion, which was marginally lower than the $27 billion recorded in 2022 since the majority of currency trades were still made on the parallel market.

The Naira reached its lowest point during the time under review on December 8 and 28, when it was trading in the official market for N1,099.05 and N1,043 per US dollar, respectively.

On September 29, the Naira passed the N1,000/US dollar barrier at the parallel market, where the majority of FX exchanges occur. By year’s end, the exchange rate was N1,215/$1.

The difference between the official and unofficial windows was N307.89 by the end of 2023, in spite of the Central Bank of Nigeria’s efforts to stabilise the exchange rate markets.

Remember that the Naira fluctuated in the foreign exchange markets on June 14, 2023, when the apex bank introduced reforms for FX unification, failing to produce the expected outcome.

The event coincides with Nigeria’s foreign exchange reserves hitting a six-year low of $32.87 billion at the end of December, according to the most recent data from the CBN.

Olayemi Cardoso, the governor of the Central Bank of Nigeria, has guaranteed Nigerians that in 2024 the value of the Naira will appreciate in the foreign exchange market.

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