Peso, Naira, and Cedi Plunge Against US Dollar, Sparking Economic Concerns

June 4, 2024 0 Posted By Kaptain Kush

The global financial landscape is experiencing a significant downturn in the value of several key currencies against the US dollar. The Peso, Naira, and Cedi have all seen sharp declines, causing economic shockwaves and raising concerns about broader global implications.

The Peso has been hit particularly hard, dropping to a near 19-month low as US treasury yields surged amid a hawkish stance from the US Federal Reserve. On Thursday, it closed at PhP 58.63 against the USD, marking a significant depreciation of 21 centavos from its previous close. This decline is part of a broader trend that has recently seen the Peso lose value, with investors increasingly wary of its stability.

In Nigeria, the Naira has continued its downward spiral, reaching a record low of 1,851/$1 on the parallel market and standing at 1,571.3/$1 on the official market. The currency’s decline is attributed to heavy pressure on foreign exchange reserves, a significant drop in oil production, and the Central Bank of Nigeria’s (CBN) devaluation of the Naira. These factors have substantially decreased the purchasing power of the Naira, impacting individuals and businesses alike.

Meanwhile, the Cedi has also depreciated significantly, with the exchange rate crossing the 15 Ghana Cedi threshold against the dollar. This has raised concerns about the country’s economic stability and the potential for further declines. The Bank of Ghana’s decision to instruct forex bureaus not to display their rates has exacerbated the Cedi’s depreciation.

These currency crises have far-reaching implications, affecting citizens’ living costs and businesses’ ability to operate and invest. Governments and central banks are under increasing pressure to stabilize their currencies and restore economic confidence.

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