Experts Predict New Naira Exchange Rates Against Dollar in 2025 as Remittances Grow
- Financial experts have predicted a promising outlook for the naira in the coming year due to several factors
- They reduced petrol and food imports could see the naira steady against the US dollar in 2025
- The experts also predicted that improved oil production and petroleum product exports could impact the naira’s value positively
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira is poised for a surprise rebound in 2025 as analysts project higher FX inflows into the economy and lower petrol and food imports.
According to them, enhanced oil production, more substantial net capital inflows into the economy, and lower petrol and food imports will occur in the coming year. They noted that all the data favour the local currency.
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Reduced petrol imports could improve naira’s value
Reports quoted Uche Uwaleke, the director of the Institute of Capital Market Studies at Nasarawa State University, saying that the outlook is due to lower petrol and food imports and increased fuel exports, which would be an FX earner for the country.
He pointed to the reduced import of petroleum products as a significant catalyst for naira’s rebound.
He further stressed the possible impact of increased earnings from the export of petroleum products.
Uwaleke noted the role of foreign portfolio investments and diaspora remittances, which would support the naira.
Naira gains against dollar
He said firm external reserves would boost the economy and preserve the naira’s value.
Meanwhile, the naira appreciated on Friday, December 19, 2024, against the US dollar to close at N1,541 per dollar, relative to N1,545 the previous day. Also, the naira traded at N1,600 per dollar in the parallel market; from N1,680, it traded on the last day.
According to analysts, the Nigerian currency has lost 70% of its value against the US dollar.
In October 2024, the local currency was deemed the world’s worst-performing currency after the Lebanese pound and the Ethiopian Birr.
Oil production to improve naira’s value
The experts disclosed that the improved oil production would positively affect external reserves and, in turn, the naira.
In November, Nigeria’s crude oil production improved to its highest level since April 2021, hitting 1.69 million barrels per day.
Also, the newly introduced Electronic Foreign Exchange Matching System (EFEMS) has seen the naira gain more value as FX trading became more transparent.
CBN data shows foreign exchange inflow in Nigeria in 2024
Legit.ng earlier reported that according to CBN data, net FX inflow to the Nigerian economy in the third quarter of this year stood at $14.46 billion, down from $14.89 billion.
The apex bank disclosed this in its report on Friday, December 19, 2024.
Per the data, the net FX exchange declined quarterly by 2.97% in the review period, but compared to the same period in 2023, the net FX inflow dropped by 75.91% from $8.22 billion to $14.46 billion.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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