Naira Starts 2024 Low Against Dollar As Tinubu’s Govt Secures Help To Achieve Exchange Rate Target
- Nigeran currency, the Naira, is starting the new year just like it ended 2023 in the unofficial foreign exchange markets
- But there is a better performance expected in the coming months as FG received a $2.25b foreign exchange support
- Tinubu's government hopes the support will help push up the value of the Nigerian currency
Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and the Economy.
Nigerian currency increased in value against the US dollar in the peer-to-peer (P2P) and the parallel market unofficial foreign exchange (FX) market segments.
Checks by Legit.ng show the Naira was trading at the peer-to-peer (P2P) at N1,205 against the against the US dollar on the afternoon of Tuesday, December 2, 2023.
Source: Getty Images
This represents a N7 loss compared to the N1,198/$ rate at which the Naira closed on Monday, December 1, during the New Year holiday.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
It was also a better scenario in the parallel market, also known as the black market.
Data shows that on the black market, the Naira closed at N1,202 on Monday but improved slightly to N1,214 on Tuesday afternoon.
Tinubu's government 2024 exchange rate target
The Naira is expected to recover in 2024, and the federal government is optimistic about an exchange rate of N750.
Legit.ng earlier reported that Ben Akabueze, the director-general of the federation's budget office, has said that the Naira will strengthen in value in the foreign exchange market in 2024.
Speaking in an interview with Channels TV on Tuesday, December 26, 2023, the Budget Office DG said this will be possible as the country expects an increase in dollar supply.
He noted that the Tinubu-led government expects the reforms initiated in 2023 to start yielding results in 2024, which is why it maintains a positive stance on the exchange rate.
The first tranche of foreign exchange support from the African Import-Export Bank has already been released, and the government is hopeful that it can utilise these funds to boost foreign supply and help the naira Punch reports.
Expert speaks
Speaking on the outlook for 2023, Amamchukwu Okafor, the Senior Consultant, at Native Insight is less optimistic of the naira in 2024.
He said:
"To ease the devaluation pressure on the exchange rate, we would have to increase our FX earnings, and reserves and clear out outstanding FX obligations to foreign businesses.
"So far, the government has continued to export crude, it has cut off subsidy on petrol products there is no enough dollar to help CBN defend the naira."
Economist sets new exchange rate in 2024
Earlier, Legit.ng reported that the Economist Intelligence Unit (EIU), a research and analysis firm, predicted that the Naira would close in 2023 with an exchange rate of N848/$ in the official market.
The EIU said that by the end of 2024, they expect the Naira to be worth N861.5 compared to one US dollar.
They also predicted that in 2024, the pressure on the Naira might reduce if the CBN does not introduce strict measures.
PAY ATTENTION: Donate to Legit Charity on Patreon. Your support matters!
Source: Legit.ng
