Naira ends 2023 49% weaker against dollar

By Sodiq Adelakun

The Naira concluded the year 2023 with a staggering 49 percent depreciation against the US Dollar.

As of the last trading day of the year, the Naira was valued at N907.11 to a dollar, according to the latest figures from the FMDQ Securities Exchange.

The Federal Government had earlier expressed hope of the naira making a rebound and gaining fair stability before the end of 2023.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele while speaking in an interview with foreign media outlet Bloomberg revealed that the Federal Government is targeting an exchange rate of N650 – N750 to the dollar by December 2023.

The FMDQ, which is the official platform for recording foreign exchange trades, noted a marginal recovery on Friday, with the Naira appreciating from its Thursday position of N1,043 to a dollar.

Despite this slight uptick, the currency’s year-to-date performance paints a grim picture, having started the year at a much stronger N461.5 to a dollar.

The total market turnover for the year was reported at $26.8 billion, showing little deviation from the $27 billion turnover of 2022.

However, it is important to note that a significant portion of foreign exchange transactions has been occurring in the parallel market, which is not captured in the official figures.

The Naira’s value hit record lows on two occasions in December, trading at N1,099.05 and N1,043 to the US dollar on the 8th and 28th, respectively, in the official market.

These figures underscore the volatility and challenges faced by Africa’s largest economy in the foreign exchange domain.

As the new year begins, stakeholders and citizens alike are deeply concerned about the currency’s trajectory and the broader economic implications of such a devaluation.

Meanwhile, at the parallel market where most forex exchanges take place, the Naira crossed the N1,000 per US dollar threshold on September 29 and ended the year at N1,215/$1.

At the end of 2023, the disparity between the official and unofficial windows stood at N307.89 despite the Central Bank of Nigeria’s effort to unify the exchange rate markets.

Recall that on June 14, 2023, when the apex bank introduced forex unification reforms, the Naira fluctuated in the forex markets, failing to achieve its desired result.

According to the Central Bank of Nigeria’s latest data, the development comes as Nigeria’s foreign exchange reserves reached a six-year low of $32.87 billion as of the end of December.

Meanwhile, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, had recently assured Nigerians that the Naira will strengthen in the FX market in 2024.