Nigeria’s currency, the naira, has experienced a significant downturn, regaining its title as the world’s worst-performing currency over the past month, as reported by Bloomberg.
The latest data reveals a depreciation of 1,466.31 against the dollar, its lowest level since March 20. This decline is primarily attributed to a shortage of US currency locally, with Thursday’s supply dwindling to $84 million, half of the previous day’s amount.
The report underscores the mounting pressure on the Central Bank of Nigeria (CBN) to consider further interest rate hikes, especially after its upcoming policy meeting on May 21. Following rate increases totaling 600 basis points in February and March, the naira had shown signs of recovery, strengthening from a low of 1,627 naira on March 8 to 1,072 in mid-April, as investors sought higher-yielding local assets.
However, the naira’s weakness extends to the unofficial market, where it dipped 0.9% to 1,468 naira against the dollar on Friday, driven by increased demand from individuals and small businesses, according to Abubakar Muhammed, CEO of Forward Marketing Bureau de Change Ltd., which monitors data in Lagos.
