Nigeria’s Currency Rate depreciates by 10.6% for 49 years – IMF

The International Monetary Fund (IMF) says that the Nigerian currency rate has depreciated by 10.6% per year since 1973.

 

 

This is according to data analyzed by the IMF and revealed in the “Nigeria: Selected Issues Paper” study.

 

 

“For almost 49 years, the Nigerian currency has been on a consistent downward trend.

 

 

“Although the Naira’s freefall observed last year appears to have come to an end, a glance at the previous era suggests that we should be concerned,” the report observed.

 

 

Nigeria currently operates a managed exchange rate region, where the exchange rate between the Naira and the US dollar trades at N416.25/$1 at the Investors and Exporters (I&E) window.

 

 

The Investors and Exporters (I&E) window is where forex is traded officially. However, the exchange rate at the parallel market trades at N575/$1, showing a difference of N158.75.

 

 

The International Monetary Fund stated that Nigeria’s currency depreciation is far above similar economics.

 

 

“Exchange rate underwent more persistent depreciation.

 

“Nigeria’s long-term rate of currency deprecation (on average 10.6 percent annually since 1973) was 1.5 times higher than both EMDE (7.2 percent) and SSA (7 percent).

 

“Given limited availability of long-term data, it is difficult to estimate the exact reasons.”

 

 

Source: Nairametrics