Currency Dealers' Predictions Fail to Help Naira Appreciate as It Stays above N1,000 Per Dollar
- The naira continued to trade above the N1,000 mark against the US dollar for the third day
- On Wednesday, January 10, 2023, the naira gained marginally against the US dollar, trading at N1,082.31 per dollar
- The development comes despite predictions by ABCON that the naira will fare better in 2024
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
Despite the forecast by the Association of Bureau de Change Operators of Nigeria (ABCON) on the naira appreciating against the dollar, the Nigerian currency has continued to sprawl.
The development comes as Forex's turnover at the official Nigerian Autonomous Foreign Exchange Market (NAFEM) grew by 148.95% to $242.60 million.
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The naira appreciates slightly against the dollar
The naira, however, appreciated marginally against the US dollar on Wednesday, January 10, 2024, in the official market, remaining above the N1,000 per dollar mark.
The Nigerian currency appreciated by 0.66% to close at N1,082.31 to a dollar at the close of business.
Data from NAFEM shows that the naira gained N7.19 against the US dollar in the official currency market compared to the N1.089.51 it closed the previous day.
The naira recorded an intraday high of N1,270.65 to the dollar and an intraday low of N700 per dollar, representing a wide margin of N570 per dollar.
In the parallel market, the naira gained marginally, trading at N1,240 per dollar, representing a 0.40% rise over what was traded the day before.
The naira's performance comes amid a $2 billion used by the Central Bank of Nigeria to offset the backlog of Forex forwards.
Analysts predict a long drought for the naira
Reports emerged that the Nigerian government had settled some forex obligations, including the backlog of debt owed to foreign airlines.
Former banker and economic analyst Ben Odegengbe told Legit.ng in an interview that it will take longer for the naira to bounce back against the US dollar because the Nigerian government needs to do more to earn foreign exchange.
"All our hopes are in crude oil earnings, which are volatile and subjected to international politics.
The US, Saudi Arabia, and Russia are the countries that control the levers of OPEC+, and they can decide to cause a crash in the price of the commodity.
So, if Nigeria depends on selling crude to earn Forex, that is a pipe dream," Ogedengbe stated.
He also said the country should boost its non-oil exports, such as agriculture, to bring in the much-needed Forex.
He said:
"For many years, crude oil has remained the country's major source of forex earnings. FDIs and portfolio investors are deserting the country in numbers, and little is needed to be more coming in terms of dollars. The naira has a long way to go before recovering."
No More N1K/$: ABCON foresees stronger naira exchange rate against the US dollar in 2024
Legit.ng reported that the Association of Bureaux De Change Operators of Nigeria (ABCON) has projected that the naira will close against the dollar in 2024 at an exchange rate of N900/$.
In an exclusive interview with Legit.ng, Aminu Gwadabe, ABCON president, also shared his expectations on the convergence between official and unofficial market exchange rates.
In 2023, the value of the naira depreciated from N450 to the dollar at the official rate to exchange between N950 and N1000 at the official market.
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Source: Legit.ng
