Naira Faces Decline, Closes Above N1,000/$: World Bank Urges Increased FX Supply for Stability

The naira, Nigeria’s currency, closed trading at N1035.12/$ on the official Investor and Exporter foreign exchange window, marking a 4.72% decline from the previous day’s rate of N988.46/$.

This is the third time ever that the naira has closed above N1,000/$ since the removal of the Central Bank of Nigeria’s rate cap. In the first two trading days of 2024, the national currency has faced a decline, reflecting ongoing challenges in the foreign exchange market.

Throughout 2023, the naira experienced one of its worst years, according to Bloomberg, and the trend seems to continue in 2024. The World Bank’s December Nigeria Development Update highlighted that the naira has depreciated by 41% against the US dollar in the official market and 30% in the parallel market. The report emphasized the need for increased FX supply to achieve stability in the official market.

The World Bank suggested that further monetary policy tightening could support the naira’s value, but there is also a crucial need to enhance FX supply.

Source: PUNCH