As the the gap between the official foreign exchange rate (forex) rate begins to deepen again, the Economic Intelligence Unit (EIU) has expressed fears that the naira may depreciate to N815 per dollar by 2024 and N1,018 to the dollar by 2027.
At the foreign exchange (fox) market weekend, brent crude oil price rose 3.9 per cent w/w to $84.00/bbl. backed by strong demand from the Sino economy as it reopens economic activities. But the increase was not reflected in the nation’s foreign reserve.
This also comes with supply being artificially contained by OPEC+ members and frail supply pull from the US.
” Meanwhile, Nigeria’s foreign reserves still falls short of expected accretion from crude earnings as it declined 0.1 per cent w/w to $33.9 billion as of July 26th, 2023″, said analysts at Afrinvest.
Across the forex market last week, naira traded within a similar band to the previous week. At the Investors & Export (I&E) window activity level improved 8.3 per cent, 32,3 million to $421.6 million, leading to 0.3 per cent w/w appreciation of the naira N775.76/$. In te parallel market the dollar appreciated 0.6 per cent w/w to N870/$, bringing a weekly average spread increase of 60.6 per cent to N89.02.
“Our forecast is finely balanced, but we expect a return to heavier exchange-rate management from the second half of 2023 as the naira slides beyond N800:US$1 from N770:US$1 in early July” the report said.
The pressure on naira is expected to continue in the near term, falling to as low as N1,018 per dollar in 2027, as high and rising inflation persist, the Economist Intelligence Unit (EIU) says.
Meanwhile, the Nigeria Exchange (NGX) last week grew by an additional N867.7 billion to cap at N35.7 trillion. All Share Index (ASI) rose by 0.1 per cent.
