Naira Joins Cedi To Compete For The Worst Currency In the World

Sadly enough, the Nigerian Naira and the Ghanaian Cedi have been listed as the two worst-performing currencies in the world, with the naira losing 37% and the cedi 55% of its value versus the dollar, respectively.

Interestingly, Bloomberg reports that while the naira was doing very well on the official market when compared to the dollar, it had suffered a 37 percent decline on the black market, placing it second only to the Ghana cedi in terms of performance.

Although Nigeria’s official exchange rate is strictly regulated, the value of the country’s currency is largely determined by the level of demand for the dollar on the black market, which has been very high as a result of the country’s strict regulatory policies against the circulation of the dollar in the country.

Not long ago, Godwin Emefiele, the central bank’s governor, announced in October that fresh naira notes would be issued on December 15.

However, given the CBN’s announcement of plans to restructure the nation’s currency, the extended ban against BDC operators will fuel its devaluation and depreciation.

Also, due to the increased outflows because of the uncertainty surrounding the upcoming presidential election, experts, have predicted that the currency’s depreciation is likely to continue in the short term.

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Recall that the Central Bank of Nigeria(CBN) prohibited the sale of foreign currency to Bureau de change(BDC) operators in 2021 in order to slow the swift depreciation of the nation’s currency.

As a result, the Bureau DeChange were charged by the central bank with engaging in unauthorized foreign exchange transactions above the market they were authorized to serve.

Bureau de change(BDC) operators played a significant role in the black market before the ban by helping those who couldn’t legally obtain foreign currency directly from the Central Bank of Nigeria(CBN) to keep their exchange rates stable.

According to Peoples Gazette, the naira traded at N890 against the dollar on Saturday, a record increase from the N700 level at which it fluctuated between late September and early October.

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Experts have also predicted that, given the rate at which the value of the currency is declining, it will trade at N1000 to the dollar by the end of the year.

Meanwhile, the Ghanaian cedi, which has lost 45.1% of its value against the US dollar this year, was ranked as the worst-performing currency in the world in October.