Naira Gains against Dollar for 2 Straight Days in Official Market Despite UK Agency’s Prediction

• The naira has pushed back against the dollar for two straight days, appreciating despite various forecasts
• The Nigerian currency has been forecasted to hit the N2,000 threshold before the end of the year 2024
• In defiance of the predictions, the naira held steady and strengthened to N1,603.38 per dollar on Tuesday, March 12, 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency has maintained its momentum against the US dollar for two straight 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.

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EIU predicts N2,000 per dollar

The report said that the Nigerian currency will cross the N2000 per dollar threshold by the end of the year, and the risks of Boko Haram activities spreading from the Northeast to central Nigeria,

The EIU report rated the risk of the naira crossing N2,00 per dollar by the end of the year as highly probable.

They also revised their economic growth prediction for Nigeria upward from 2.2% to 2.5% based on higher than usually expected crude oil production and the impact of the Dangote refinery.

The group also sees a faster growth of 3.5% in 2025 while it forecasts consumer price inflation to reduce to 20% in 2025 and 17.4% in 2026 before reaching 11.7% two years later.

The EIU also sees a further devaluation of the naira in the coming years.

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The EIU forecast comes amid another one by Goldman Sachs, that the Nigerian currency will finally rally at N1,200 per dollar before the end of 2024.

Naira foils predictions, gains against the dollar

However, the naira recovered in the official market against the US dollar on Monday, March 11 and Tuesday, March 12, 2024.

The Nigerian currency traded at N1,603.38 against the dollar compared to the N1,616.96 it traded on Monday, March 11, 2024.

Data from NAFEM shows that the local currency gained over N13 against the US dollar.

Traders quoted the intraday high at N1,637.00 per dollar and a low of N1,435.

The naira also recovered in the parallel market, exchanging for N1,600 per dollar against the N1,620 it traded the previous day.

The naira volatility has continued despite the Nigerian government saying that Forex inflows quadrupled in February to over $1 billion.

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Legit.ng reported that Naira's exchange rate improved against the US dollar in official and unofficial foreign exchange markets. Data from FMDQ securities shows that in the official market, the Nigerian Autonomous

Foreign Exchange Market (NAFEM), the naira closed at N1,617.96/$1 on Monday, March 11, 2024.

Monday's rate represents a 0.6% or N9.44 appreciation compared to last Friday's exchange rate of N1,627.40/$1.

Source: Legit.ng