Naira Lost Value By 200% In 10 Years - Afrinvest - THE WHISTLER
The naira has lost value by 200% in the last ten years from 2010 to 2020, Afrinvest said.
Afrinvest, an independent investment banking firm, said this in a publication titled, ” Things to know before making a dollar investment,” which was emailed to THE WHISTLER.
“Naira has lost value by 200% to the dollar in the last ten years. N150 thousand was $1,000 in 2010, now it is $333,” Afrinvest said in the report.
The naira had traded at N150 per dollar in 2010, but fell to N450 per dollar, representing 200% fall in value in 2020.
In 2011, the data by Afrinvest shows naira to have plunged to N154 against the dollar, while it slumped further to N158 and N157 and N159 in 2012, 2013 and 2014 respectively.
Nigeria had in 2015 exchanged the local currency at N192 against dollar, but the country slipped into recession in 2016 which led to further devaluation of the naira to N254 per dollar. The recession was induced by low oil prices which were below $60 per barrel from $112/barrel .
Despite recovering from recession in 2017, the naira continued its decline to N360 per dollar.
The naira traded at N360 in 2018 and 2019, but dipped by 24% to N450 in 2020.
A second recession is looming as the International Monetary Fund (IMF) forecast that the Nigerian economy will contract by 3.4% this year due to the impact of COVID- 19 on the country’s economy.
Nigeria’s real effective exchange rate (REER) is above 130 which shows that the currency is overvalued, Blomberg and IMF data detailed.
REER is the weighted average of a country’s currency in relation to an index or basket of other major currencies.
The Central Bank had in March 2020 adjusted the official rate of the naira by 17.5% to N360 from N306 per dollar.
Goldman Sachs has said that it will take an exchange rate of N600 per dollar for the naira to be stable considering crude oil which sells for $28 dollar a barrel as of Sunday.
THE WHISTLER had reported that as of Friday, the naira plunged against the dollar to sell at N455, from N450. Edited.