The official exchange rate between the naira and the United States dollar ended in 2024 at N1,535/$, according to the data from the Central Bank of Nigeria (CBN).
This was a 40.9 per cent depreciation over the year when compared to the official rate at the close of 2023, which stood at N907.11/$.
The analysis of the data shows that the significant depreciation comes amid the CBN’s introduction of several foreign exchange policies aimed at enhancing market transparency and attracting foreign investors.
These measures included reforms such as the unification of Foreign exchange (FX) windows under the Nigeria Foreign Exchange Market and the introduction of the Nigerian FX Code, which mandated ethical conduct and governance among market participants.
On the parallel market, where the naira trades unofficially, the currency exchanged at N1,660/$ at the end of 2024.
This represents a 26.8 per cent depreciation from N1,215/$ recorded at the close of 2023.
The year 2024, saw the CBN aggressively expand market-friendly policies to stabilise the FX market and attract foreign investment.
The CBN also announced that it had successfully cleared all valid FX backlogs, fulfilling a key commitment by Governor Olayemi Cardoso to address the inherited $7bn in outstanding claims.
In May 2024, the CBN issued revised guidelines to strengthen the operations of Bureaux de Change operators in Nigeria.
The guidelines define permissible activities for BDCs, such as sourcing foreign currency from specified entities and selling foreign exchange for purposes like Personal Travel Allowance and Business Travel Allowance.
The CBN automated foreign currency trading to replace the over-the-counter system, improving market efficiency and oversight.
According to the analysis by Punch newspaper, despite these interventions, the naira faced immense pressure from limited foreign exchange inflows, the widening gap between official and parallel market rates, and lingering effects of capital flight by foreign investors.
It added that the World Bank listed the naira among the worst-performing currencies in Sub-Saharan Africa in 2024.
GIK/APA