A report from Stear’s Africa FX Monitor has advised Nigerians to brace for continued downward pressure on Nigeria’s FX rates.
The Africa FX Monitor, in the report released on Thursday, anticipates that the volatility of the Naira will persist in the coming days, with black market rates projected to trade as high as N985 per US Dollar in the short term.
As of yesterday, Nairametrics reported that the dollar was already trading at N984 on the P2P platforms. The exchange rate also closed at N770.7/$1 on the official NIFEX window.
Over the past seven years, Nigeria’s currency has shed over 30% of its value. Despite the recent attempt by the Federal Government to unify the country’s multiple exchange rate system and restore balance to the forex market, Stears’ Africa FX Monitor indicates that market participants are pricing in forex market fundamentals and distortions, leading to ongoing challenges in achieving forex stability.
Informed business decisions
Commenting on the report, Head of Insights at Stears
Fadekemi Abiru expressed concerns about the ongoing Naira volatility. She, however, noted that the knowledge of this volatility should help Nigerian businesses in making informed decisions.
- “Stears’ Africa FX Monitor serves as a vital tool for understanding and responding to the Naira’s fluctuations. The continued unpredictability of the Naira underscores the importance of timely and informed decision-making for businesses and investors in Nigeria,” she said.
Also commenting on the report, Senior Economist at Stears, Dumebi Oluwole, said:
- “The dynamics of the Naira are closely intertwined with global economic trends, geopolitical events, and local policy decisions. Stears’ Africa FX Monitor goes beyond the numbers, providing businesses and investors with a nuanced understanding of how these factors impact the Naira’s value. In today’s volatile market, knowledge is a powerful tool for making strategic financial decisions.”
The Stears’ Africa FX Monitor highlights fiscal policies, external trade, and global market trends, including inflation rates, interest rates, policy events, and geopolitical factors as key influencers affecting the Naira’s performance.
The intelligence tool, a comprehensive exchange rate data repository, provides daily FX updates on Africa’s top economies, such as Nigeria, Kenya, and South Africa. It also includes insights on daily FX drivers. (Nairametrics)
