NAIRA PREDICTED TO HIT 1,000/$ EXCHANGE RATE BEFORE THE WEEKEND.
The naira has continued its strengthening against the United States dollar. The Nigerian currency appreciated to N1,050/$ at the official market and N1,136/$ at the parallel market by the close of trading activities on Monday.
Traders predicted the dollar’s fall to below N1,000 before the end of the week.
Data from the FMDQ Exchange, a platform overseeing the Nigerian Autonomous Foreign Exchange Market, showed the naira surged by 6.1 percent or N69 from N1,205/$ on Friday to N1,136/$ on Monday at the official foreign exchange market.
Total daily turnover dropped slightly to $251.60 million on Monday from $281.34 million recorded on Friday.
The intra-day high also improved significantly, closing at N1,227 per dollar from N1,265 per dollar quoted on Friday.
The intra-day low appreciated by N100/$1 as the dollar was quoted at N1,000 on Monday, stronger than the N1,100 quoted on Friday.
The improved rate followed a series of foreign exchange directives by the Central Bank of Nigeria aimed at stabilizing the naira.
The apex bank last month announced it had resolved all valid foreign exchange backlogs, addressing inherited claims amounting to $7 billion.
Data from the FMDQ also showed total inflows into the NAFEM increased by 41.7 percent to $3.75 billion from $2.64 billion in February – the highest level since March 2019 ($6.07 billion).
The apex Bank reviewed the exchange rate for Bureau De Change operators to N1,101 per dollar from N1,251/$1 last week, planning to sell $15.88 million to 1,588 eligible BDC operators.
As part of measures to control inflation and stabilize the naira, the CBN raised its benchmark interest rate, known as the Monetary Policy Rate by 200 basis points to 24.75 percent from 22.75 percent in February 2024.
Analysts at Afrinvest anticipate that the naira would continue to strengthen as the CBN intensifies efforts to bolster liquidity in the market.
Goldman Sachs Group noted that the Naira had established itself as the top-performing currency globally in April, expecting it to extend its gains amid effective policy management by the Central Bank of Nigeria.
Goldman Sachs economists previously forecasted in February that the Naira would strengthen to N1,200/$ in 2024, now anticipating it could surpass this level due to aggressive measures by the central bank, including a total of 600 basis points in interest rate increases during policy meetings in February and March.
Source: Techeconomy
