Naira Gains Against All Currencies, Nears N1,500/$ in Official, Black Markets After EIU Prediction
- The Nigerian currency has made a massive comeback against major currencies, especially the dollar
- The naira recovered below the N1,600 per dollar mark it has traded for over two weeks
- The development comes despite a prediction by the Economist Intelligence Unit (EIU) that the naira will fall below N2,000 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency recovered below the N1,600 per dollar in the official market, leaving the N1,600 threshold it has occupied for two weeks.
The naira closed in the Nigerian Autonomous Foreign Exchange Market (NAFEM) at N1,572.82 per dollar on Monday, March 18, 2024, as against the N1,602.72 it closed on Friday, March 15, 2024.
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The Naira closes below the N1,600 mark
The recent rate is the first time the Nigerian currency closed below the N1,600 mark since March 5, 2024, when it began trading above N1,600.
Data from NAFEM shows that the naira appreciated by 2.20% in Forex tradings to reach $140.54 million as against the N$137.43 million recorded earlier.
Reports say traders quoted the naira at an intraday high of N1,640 and a low of N1,400 per dollar on Monday, March 18, 2024.
The naira pound major currencies
The Nigerian currency also strengthened against the US dollar in the parallel market, recovering by 0.78% to trade at N1,614 per dollar.
The naira also gained against the British pound by 0.74% to end trading at N2,030 per pound from N2,045 per pound.
It also recovered against the euro by 0.58% to close at N1,725 per euro from N1,735 per traded on Monday, March 15, 2024.
The development comes amid a forecast by the Economist Intelligence Unit (EIU) that the naira will eventually trade at N2,381 per dollar in 2024.
The research firm predicted that the naira would depreciate to N2,381 per dollar, saying that the spread with the parallel market would be about five to 15%.
EIU predicts new interest rate hike by CBN
The EIU said continued high inflation, deficit monetisation, negative short-term accurate interest rates, low foreign reserves, and a backlog of foreign exchange requests would continue to drain confidence in the naira despite a 45% devaluation in February.
Per the report, Nigeria will use foreign loans to rebuild foreign reserves, adding that the naira will stabilise at the end of 2024.
The EIU said the exchange rate would become more potent if the Central Bank of Nigeria (CBN) tightened monetary policy more aggressively than expected.
It forecasted a new 100 basis points increase in the Monetary Policy Rate (MPR) to 23.75% from the current 22.75% in 2024.
Naira gains against the dollar for 2 straight days
Legit.ng reported that the Nigerian currency has maintained its momentum against the US dollar for two consecutive days despite the prediction by the UK research group, the Economist Intelligence Unit (EIU), that it will hit N2,000 per dollar in 2024.
The EIU, in its March 2024, reported the high possibility of Nigeria moving too rapidly on market reforms and causing unrest that could force the government to make concessions on its reform policies and labour union strikes that could grind the economy to a halt.
Source: Legit.ng
