The currency rate between the naira and the dollar closed the year at N1,535/$1, reflecting a 40.9% loss in 2024.
In 2023, the official naira-to-dollar exchange rate ended the year at N907.11/$1, declining 40.9%, compared to a 49.1% devaluation at the end of 2023.
As the central bank built on its market-friendly foreign exchange policies to draw in foreign investors, Nigeria implemented a number of new foreign exchange regulations in 2024.
In the meantime, Nairametrics tracking records show that the naira was worth N1,660 to the dollar on the parallel market, where the exchange rate is sold informally, as opposed to N1,215/$. This amounts to a depreciation of 26.8%.
Both the weighted average rate and the NFEM rate closed at N1536.5 and N1535.8, respectively.
When compared to the N1,45/$1 exchange rate recorded at the end of January 2024, the exchange rate has stayed largely within the 5–10% range despite the 40.9% depreciation that occurred during the year.
Additionally, according to data from the apex bank, its external reserves as of December 30, 2024, were $40.8 billion, a 24% increase from the $32.9 billion it closed with at the end of 2023.
2024: Year of many FX Policies
In 2024, the Central Bank of Nigeria (CBN) launched numerous policies intended at easing FX issues and stabilizing the Naira. Early in the year, CBN Governor Cardoso underlined that the Naira was undervalued and advocated for genuine price discovery.
Supported by the CBN’s crackdown on forex speculation and partial clearing of airlines’ foreign exchange claims, the Naira rose to N1,455.59/$1 by January 31.
In February, additional reforms were implemented, such as the removal of the ±2.5% cap on interbank foreign exchange transactions, which signaled a gradual shift towards a free-floating exchange rate. The EFCC was also tasked with preventing dollarization and Naira mutilation.
In March, the Federal Government fined Binance $10 billion for forex violations, and the CBN revoked the licenses of 4,173 Bureau De Change (BDC) operators to tighten forex management. The Naira recovered well during the month, recording its best performance in five years.
However, April produced a range of outcomes, with the Naira initially appreciating to N980/$1 at the BDCs before declining by 5.8%. In order to increase inflows, the CBN also established a remittance task force and prohibited foreign currency collateral for Naira loans.
The CBN revised its rules for BDCs by the middle of the year, raising the capital requirement to ₦2 billion and allowing operators six months to comply. Notwithstanding these steps, the Naira continued to face difficulties in the foreign exchange market, closing May at N1,485.99/$1 and falling further in July to N1,611/$1.
Increased remittance inflows, a $500 million domestic bond issuance, and the reinstatement of RDAs and auctions in August were all part of ongoing efforts to bolster currency liquidity.
In an attempt to increase foreign exchange inflows, the Federal Government of Nigeria opened a nine-month window in November 2024 for Nigerians to deposit hidden foreign money in banks.
Simultaneously, the CBN established new FX trading regulations, such as a $100,000 minimum trade requirement, and authorised banks to trade idle FX deposits from designated domiciliary accounts. Governor Cardoso introduced an FX matching system to solve the Naira’s valuation issues and further stabilise the currency market.
BDCs can now purchase currency directly from approved dealers thanks to new guidelines and revised FX market regulations announced by the CBN.
In December, the CBN also released new guidelines and revised the rules governing the currency market, allowing BDCs to buy up to $25,000 per week from NFEM.
The Naira continued to rank among the worst-performing currencies in Sub-Saharan Africa in spite of these efforts, indicating the continuous difficulties in attaining forex stability.
