Naira now third worst performing currency in the world

Nigeria’s local currency the naira which has lost about 70% of its value against the dollar, is now the third worst performing currency in the world after the Lebanese Pound and the Ethiopian Birr.

The naira weakened 4.3%, the most since Oct. 15, to 1,670.65 to the dollar on Monday, according to data compiled by Bloomberg. The weakness followed a 72% plunge in dollar liquidity to $81 million – its lowest level in more than a month.

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The Naira fell the most in about two weeks to a record low, after of a steep drop in dollar liquidity in the foreign exchange market.
Liquidity in the foreign exchange market has remained low as the West African nation prioritizes building its reserves, which at 39.4 billion dollars on Oct. 24 was the highest in about two years.

Africa’s largest crude producer has struggled to stabilize its currency since it was allowed to trade freely against the dollar in June last year.

The struggle is attibuted maainly to the failure of the country to ramp up its crude oil production which has fallen to levels last seen in 1992.

Last week, Finance Minister Wale Edun lamented the low oil production levels saying raising output remained the sure way to boost FX position and strengthen the Naira.