The change fee between the naira and the greenback ended the yr at N1,535/$1 representing a 40.9% depreciation for 2024.
The official change fee between the naira and greenback closed in 2023 at N907.11/$1 thus depreciating by 40.9% for the yr which compares to a 49.1% devaluation on the finish of 2023.
Nigeria launched a number of international change insurance policies in 2024 because the central bank expanded on market-friendly foreign exchange insurance policies to draw international traders.
In the meantime, on the parallel market the place the change fee is bought unofficially, the naira exchanged for N1,660 to the greenback when in comparison with N1,215/$ based on Nairametrics monitoring information. This represents a 26.8% depreciation.
The NFEM fee and the weighted common charges each closed at N1535.8 and N1536.5 respectively.
Regardless of the 40.9% depreciation recorded throughout the yr, the change fee has remained largely throughout the 5-10% vary when in comparison with the N1,45/$1 change fee recorded on the finish of January 2024.
Knowledge from the apex bank additionally exhibits the exterior reserves as of thirtieth December 2024 was $40.8 billion representing a 24% improve from the $32.9 billion it closed on the finish of 2023.
12 months of Foreign exchange insurance policies
In 2024, the Central Bank of Nigeria (CBN) launched a number of insurance policies geared toward addressing foreign exchange challenges and stabilizing the Naira. Early within the yr, CBN Governor Cardoso emphasised that the Naira was undervalued and referred to as for real value discovery.
By January 31, the Naira appreciated to N1,455.59/$1, supported by CBN’s clampdown on foreign exchange hypothesis and partial clearance of airways’ FX claims.
February noticed additional reforms, together with the discontinuation of the ±2.5% cap on interbank FX transactions, signaling a gradual transfer in the direction of a free-floating change fee. Moreover, the EFCC was tasked with curbing dollarization and Naira mutilation.
In March, the Federal Authorities fined Binance $10 billion for foreign exchange violations, whereas the CBN revoked the licenses of 4,173 Bureau De Change (BDC) operators to tighten foreign exchange administration. The Naira rebounded considerably throughout the month, recording its greatest efficiency in 5 years.
Nevertheless, April introduced blended outcomes, with the Naira depreciating by 5.8% after an preliminary appreciation to N980/$1 on the BDCs. The CBN additionally banned international foreign money collateral for Naira loans and created a remittance job drive to reinforce inflows.
By mid-year, the CBN launched new tips for BDCs, growing the capital requirement to ₦2 billion and giving operators six months to conform. Regardless of these measures, foreign exchange challenges persevered, with the Naira closing Could at N1,485.99/$1 and dropping additional in July to N1,611/$1.
Efforts to spice up foreign exchange liquidity continued with the reintroduction of RDAs and auctions in August, alongside elevated remittance inflows and a $500 million home greenback bond issuance.
In November 2024, the Federal Authorities launched a nine-month window permitting Nigerians to deposit undisclosed foreign exchange in banks, as a part of efforts to enhance foreign exchange inflows.
Concurrently, the CBN granted banks approval to commerce idle FX deposits from designated domiciliary accounts and launched new FX buying and selling tips, together with a $100,000 minimal commerce mandate. To additional stabilize the foreign exchange market, Governor Cardoso unveiled an FX matching system designed to handle the Naira’s valuation challenges.
CBN overhauled FX market guidelines and issued new tips, permitting BDCs to purchase foreign exchange straight from approved sellers.
The CBN additionally overhauled foreign exchange market guidelines in December and issued new tips, additionally allowing BDCs to buy as much as $25,000 weekly from NFEM.
Regardless of these interventions, the Naira remained one of many worst-performing currencies in Sub-Saharan Africa, reflecting the continuing challenges in attaining foreign exchange stability.
Be First to Comment