Naira has emerged as the star performer in the currency market for the month of April, riding a remarkable surge against the US Dollar, according to insights from Goldman Sachs.
The financial powerhouse’s latest report unveils a bullish forecast, suggesting that the Nigerian currency’s upward trajectory may soon see it trading below the milestone of N1,000 per Dollar, signaling potentially significant economic shifts in the near future.
Goldman Sachs economists, in their comprehensive analysis of Nigeria’s economic landscape, spotlight the Naira’s impressive ascent, citing a staggering 12 percent appreciation against the Dollar in April alone.
This surge builds upon the currency’s robust 14 percent rally recorded in the preceding month of March, painting a picture of sustained momentum in the forex markets.
The report underscores the Naira’s resilience and market dynamics, highlighting its remarkable journey from previous forecasts to present realities.
In a prescient projection made in March, Goldman Sachs had anticipated the Naira’s ascent to N1,200 per Dollar by the year’s end.
Remarkably, this prediction materialized sooner than expected, as evidenced by Monday’s exchange rates, which saw the Naira trading at N1,230.61 in official markets and a more favorable N1,200 in the parallel market.
Central to the Naira’s recent gains has been the strategic intervention of the Central Bank of Nigeria (CBN), which has implemented measures aimed at stabilizing the currency and bolstering investor confidence.
Notably, the CBN’s decision to revise its selling rate of foreign exchange (FX) to Bureau De Change (BDC) operators, reducing it to N1,101 per Dollar from the previous N1,251, injected further momentum into the Naira’s appreciation.
This intervention facilitated a notable appreciation of N60, with the Naira trading at 1,140 per Dollar in the Parallel Market by the close of the week.
The backdrop to the Naira’s resurgence has been a series of strategic policy interventions by the CBN, aimed at fostering capital inflows and shoring up the country’s economic resilience.
At its recent Monetary Policy Committee (MPC) meeting, the CBN underscored its commitment to safeguarding the Naira’s value by implementing measures such as raising the interest rate to 24.75 percent.
These proactive steps have helped the currency recover from previous setbacks, including two devaluations witnessed since June of the previous year.
In summary, the Naira’s stellar performance in April serves as a testament to the resilience of Nigeria’s currency amidst global economic fluctuations.
With Goldman Sachs’ bullish forecast pointing towards further appreciation and the CBN’s proactive interventions bolstering investor confidence, the stage is set for continued stability and growth in Nigeria’s economic landscape.
