JP Morgan Predicts New Naira Exchange Rate against Dollar in 2025
- American investment banker, JP Morgan, has said that Nigeria currency, the naira, may improve in value to N1,450 per dollar in 2025
- The ratings agency disclosed that the net FX reserve released by CBN and the leadership change at NNPC are catalysts to the Nigerian economy
- It predicted that due to the two changes, the Nigerian economy is insulated from US slowdowns
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
JP Morgan, the American investment banker, has said the change in the leadership of the Nigerian National Petroleum Company Limited (NNPC) and the release of Nigeria’s net foreign exchange reserves (NFER) are changing the tide in the market.
Amid increasing global uncertainty, JP Morgan upheld a positive rating on the Nigerian market, stating it is insulated from US slowdowns.
Source: Getty Images
JP Morgan predicts naira stability
The company disclosed this in its note to investors on Wednesday, April 2, 2025, stating that the Nigerian market provided enough rate protection to ease potential FX losses.
According to the bank, it expects Nigeria's T-Bills to continue to perform well due to imminent catalysts as the Central Bank of Nigeria (CBN) published net FX reserves, while President Bola Tinubu changed the board and management of the NNPC.
JP Morgan hails leadership change in NNPC
It rated the net FX reserve release as a short-term catalyst and NNPC leadership change as a medium-term catalyst.
Legit.ng reported that President Tinubu replaced the NNPC leadership less than 24 hours after CBN released the country’s NFER.
JP Morgan sees the two decisions as a confidence booster for Nigeria, which has battled FX and macroeconomic challenges.
After the decisions, the forex market experienced some stability, though the naira depreciated slightly.
The American lender said that the NFER aligns with expectations, warning that CBN’s commitment to improving reserve quality should not be understated.
CBN claimed that the NFER hit a three-year high of $23.11 billion but failed to publish its short-term and medium-term FX liabilities.
JP Morgan said:
“This is in line with our broader view that the current government (and by extension the CBN) is, indeed, committed to a more market-friendly approach to policymaking.
The Guardian reports that the ratings agency disclosed that the leadership change in NNPC was a giant step in the oil sector reform plans, saying that a private sector-led NNPC would cause reforms in other oil sectors.
Nigeria’s FX liquidity to improve
The agency said while the NNPC leadership change may lead to an increase in oil production, it should result in improved transparency and better FX to the government.
It disclosed that the country’s current account surplus remains large at $17.5 billion in 2024.
JP Morgan saw the NNPC’s FX financing deals as the next catalyst expected to improve FX liquidity in the near term.
Source: Getty Images
It disclosed that oil swap deals being negotiated by the state oil firm matured, projecting that the NNPC could have about $9.5 billion in new financing deals in the coming months to be used to repay arears owed for petrol imports and boost the nation’s reserve.
Naira experiences the biggest fall in 2025
Meanwhile, Legit.ng reported that the Nigerian naira hit its lowest in 30 days on Thursday, April 3, 2025, in the official Nigerian Foreign Exchange Exchange Market (NFEM).
Data from the Central Bank of Nigeria (CBN) shows that the naira depreciated to N1,569 per dollar from N1,534, the previous day.
The depreciation is the lowest the local currency has gone in over 30 days as analysts fear it might fall off the N1,500 ceiling against the dollar.
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Source: Legit.ng
