Naira’s Value Against The Dollar Has Dropped 69% Post-FX Reforms
According to a report, the naira has depreciated by 69.47% against the US dollar under President Bola Ahmed Tinubu’s administration, amid foreign exchange reforms.
Data from the FMDQ Securities Exchange revealed that the naira’s value declined from N469.50/$ on June 8, 2023, to N1,537.96/$ currently, post-unification of the FX markets.
The FX market witnessed heightened pressure, leading to the naira hitting an all-time low of N1,537.96 per dollar at the official market. Despite the Central Bank of Nigeria’s interventions, the naira is expected to remain weak due to dollar liquidity shortages.
At the parallel market, the naira closed at a record low of N1,650 per dollar on Friday, reflecting strong demand for the greenback amidst scarcity, as noted by Abiodun Keripe, Managing Director at Afrinvest Research and Consulting.
Over the past decade, the country’s currency has depreciated by 89.73% at the official market, leading to increased inflation, diminished purchasing power, reduced investment, and business pressure.
According to data from the central bank, on February 14, 2024, one dollar was quoted at N1,517.20 (CBN rate), compared to N155.75 on February 14, 2014. Additionally, Nigeria’s external reserves, which serve as the CBN’s defense against naira depreciation, have declined by 6.35% over the past 10 years due to low foreign exchange earnings, driven by oil price volatility and high FX demand.
CBN data shows Nigeria’s foreign currency reserves dropped from $35.42 billion on February 13, 2014, to $33.17 billion on February 13, 2024. Furthermore, crude oil prices have also decreased by 21.16% over the last decade, falling to $86.98 per barrel on February 13, 2024, from $110.32 per barrel on February 13, 2014, as per CBN records.
