Naira depreciated by 40.9% per dollar in 2024 – Report

A report has shown that the naira depreciated by 40.9% per dollar in 2024 after ending the year at N1,535 to the United States (US) currency.

“The exchange rate between the naira and the US dollar closed at N1,535/$1 by the end of 2024, representing a 40.9% depreciation over the year,” News Central TV wrote on its website.

“This compares to a 49.1% devaluation recorded in 2023 when the naira ended at N907.11/$1.”

It said in the parallel market, where the exchange rate operates unofficially, the naira exchanged at N1,660 to a dollar, reflecting a 26.8% decline from N1,215/$1 at the end of 2023.

Despite the depreciation, the report added that Nigeria’s forex landscape saw significant policy changes in 2024, driven by the Central Bank of Nigeria’s (CBN) efforts to attract foreign investment and stabilize the naira.

Throughout the year 2024, the CBN came up with reforms such as eliminating interbank trading caps, clamping down on speculative trading, and enhancing foreign currency inflows.

The CBN Governor Olayemi Cardoso had said that the naira was undervalued, prompting initiatives for genuine price discovery.

Cardoso said the CBN would be repositioned to grow the size of the Nigerian economy to an ambitious value of $1 trillion in Gross Domestic Product (GDP) in the next eight years.

He also vowed to embrace a culture of compliance and internal control of commercial banks, halt the continuous fall of the naira in the foreign exchange market and tackle the rising inflation rate.

Cardoso also called for the need to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance.

“Much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred,” he said.

“In refocusing CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”

By January 31, 2024 the naira appreciated to N1,455.59/$1, but dropped further to N1,611/$1 by July.

Data from the CBN revealed that Nigeria’s external reserves closed at $40.8 billion, a 24% increase from $32.9 billion at the end of 2023.

The Naira Futures Exchange Market (NFEM) and weighted average rates ended the year at N1,535.8/$1 and N1,536.5/$1, respectively.