Naira among worst performing currencies, says World Bank

Naira among worst performing currencies, says World Bank

 

The World Bank has said the naira is among the worst-performing currencies in sub-Saharan Africa this year.

It gave the verdict in its regional economic outlook report ‘Africa’s Pulse,’ released recently.

The naira closed at N1,658/$ at the official market on October 15.

The World Bank noted that the naira had continued to lose value, with a year-to-date depreciation of about 43 per cent as of August 2024.

It said limited dollar inflows and slow foreign exchange (FX) disbursements to bureaus de change (BDC) operators by the Central Bank of Nigeria (CBN) had weakened the naira.

The international lender also said the demand for dollars, driven by financial institutions, non-financial end-users, and money managers, had exacerbated the pressure on the naira.

The World Bank said, “By August 2024, the Ethiopian birr, Nigerian naira, and South Sudanese pound were among the worst performers in the region,” the World Bank said.

It also declared the Kenyan shilling as the best performing currency in Sub-Saharan Africa this year, appreciating by 21 per cent by end-August 2024.

“The Nigerian naira continued losing value, with a year-to-date depreciation of about 43 per cent as of end-August.

In Nigeria, the World Bank said, “Surges in demand for US dollars in the parallel market, driven by financial institutions, money managers, and non-financial end-users, combined with limited dollar inflows and slow foreign exchange disbursements to currency exchange bureaus by the central bank explain the weakening of the naira.”

In comparison with other currencies, it said, “The Kenyan shilling is the best performing currency in Sub-Saharan Africa this year: it appreciated by 21 percent year-to-date by end-August 2024.”