Bloomberg, economists predict further naira depreciation in 2024

BLOOMBERG, a US-based media organisation, and some economists on Friday, December 29, predicted further naira depreciation in 2024.

According to the media outfit, the naira is poised for its worst year since the return to democracy in 1999, adding that analysts are predicting further depreciation in 2024.

The naira, it would be recalled, began a chaotic dance against the US dollar in June 2023 after the Central Bank of Nigeria (CBN) unified all segments of the foreign exchange (FX) market, allowing the currency to trade more freely.

This development, in addition to the weak inflow of the US dollar into the Nigerian economy and excessive borrowings by the government, triggered deeper currency problems and inflation at 28. 2 per cent as of November 2023.

According to the Bloomberg report, the naira fell 55 per cent this year to N1,043 per dollar at the official market on Thursday, December 28.

Its decline, Bloomberg said, made it the third worst-performing currency in the world behind the Lebanese pound and the Argentine peso — among 151 currencies tracked by the media firm.

Commenting on the Federal Government’s reforms, the publication said the end of the petrol subsidy and naira depreciation fueled inflation, while the benchmark interest rate is at 18.75 percent.

The report further said that foreign reserves in Nigeria are at the lowest in six years, with most of them burdened by overdue short-term overseas obligations.

Some economists shared similar concerns that Nigeria’s import dependency exposed the naira when paired against the US dollar.

The World Bank’s lead economist for Nigeria, Alex Sienart, who spoke on this development and the current administration’s policies, said the reforms were difficult.