Naira is now the World’s Worst Performing currency – Bloomberg report

According to a new report from Bloomberg, the naira, the country’s currency, has lost value and become the worst-performing currency in the world over the past month.

The change happened after the naira had recently gained value. It is now the world’s worst-performing currency after doing very well last month.

The report, which came out on Friday, made it clear that the event has made the Central Bank of Nigeria (CBN) feel even more pressure to keep raising interest rates.

It lost value against the dollar and hit a low point of 1,466.31. This was the lowest level since March 20.

The report says that the drop is because US dollars are hard to come by in the area. On Thursday, there were only $84 million in circulation, which is half of the amount that was available the day before.

In April 2024, Yemi Cardoso, who is the head of the Central Bank of Nigeria (CBN), said that the naira was the best-performing currency in the world.

In March, the naira had a rough time. On the legal market, it fell as low as N1,600/$1, and on the black market, it fell as low as N1800/$1.

However, the governor of the Central Bank of Nigeria (CBN) said that the success was due to changes made to the foreign exchange market and good feelings from major international investment banks.

Razia Khan, Chief Economist for Africa and the Middle East at Standard Chartered, told Bloomberg that $1.3 billion in naira futures will mature at the end of this month, which could make the market less optimistic.

“The belief is that this will create more demand for dollars.

“When the currency appreciated very fast, there had been a bout of profit-taking by offshore investors, and this meant that the dollar-naira exchange rate backed up again.

“This is completely in line with the functioning market,” she said.

The report further pointed out that the decline in the naira’s performance is expected to intensify pressure on the CBN to implement another rate hike after its upcoming policy meeting on May 21.

The report noted that the Central Bank increased rates by a total of 600 basis points in February and March, saying this aided the naira in rebounding from its low of 1,627 naira on March 8 to 1,072 in mid-April, as investors sought out higher-yielding local assets.

The weakness of the naira was also seen in the unofficial market, where it depreciated by 0.9% to N1,468 against the dollar on Friday.