The Nigeria’s naira has taken a bad turn emerging the world’s worst-performing currency over the last month.
The Goldman Sachs Group had in April adjudged naira as the world’s best-performing currency.
The change in fortune announced by Bloomberg on Friday, according to the report, places increased pressure on the Central Bank of Nigeria to continue raising interest rates.
The incumbent CBN Governor, Yemi Cardoso floated the naira and consequently the currency has been experiencing both bad and good turns.
During the latter’s period a thousand naira was almost exchanged for a dollar.
This, Cardoso attributed to a series of foreign exchange market reforms and positive sentiment from leading international investment institutions.
This time, naira has depreciated to 1,466.31 against the dollar, marking its weakest level since March 20.
This decline as per report is attributed to the local scarcity of the US currency, with only $84 million available on Thursday, half of the previous day’s supply.
The naira faced challenges in March, plummeting to as low as N1,600/$1 on the official market and N1800/$1 on the parallel market.
Speaking with Bloomberg, the Chief Economist for Africa and the Middle East at Standard Chartered, Razia Khan, estimates that $1.3 billion in naira futures will mature at the end of this month, potentially dampening market sentiment.
“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.
