.jpeg "Naira is one of Africa's worst-performing currencies, according to the World Bank.")
According to the World Bank, the Nigerian currency, the naira, has experienced a depreciation of almost 40% in relation to the United States dollar subsequent to its devaluation in June.
The research titled "Africa's Pulse: An analysis of issues shaping Africa's economic future (October 2023 | Volume 28)" published by a worldwide bank unveiled the following information.
To far, the Nigerian naira and the Angolan kwanza have exhibited significant underperformance within the area, with both currencies experiencing a year-to-date depreciation of approximately 40 percent.
The depreciation of the naira was initiated by the central bank's choice to eliminate trading limitations on the official market. The central bank made the choice to cease currency defense during the kwanza period due to the impact of reduced oil prices and increased debt obligations.
Several African countries have experienced major losses in their currencies in 2023. South Sudan's currency has depreciated by 33 percent, while Burundi's has seen a 27 percent decline. The Democratic Republic of Congo, Kenya, Zambia, Ghana, and Rwanda have also had notable depreciations, with their currencies losing 18 percent, 16 percent, 12 percent, 12 percent, and 11 percent respectively.
It is worth mentioning that the presence of parallel exchange market rates is exacerbating inflationary challenges for certain countries in the African region.
In June 2023, the Central Bank of Nigeria (CBN) issued a directive to Deposit Money Banks (DMBs) to eliminate the rate cap on the Nigerian currency within the official Investors and Exporters' window of the foreign exchange market.
The central bank issued a directive instructing financial institutions to permit the unrestricted fluctuation of the Nigerian currency, the naira, in relation to the United States dollar and other major international currencies.
Subsequent to that period, the Nigerian currency, the naira, experienced a depreciation from an exchange rate of N473.83 per US dollar to almost N800 per US dollar, as officially reported.