The World’s Top-Performing Currency. Nigeria’s Naira is poised to extend its gains, having already established itself as the top performer globally this month, according to a Goldman Sachs Group Inc. economist, contingent on continuing effective policy management.
In April alone, the Naira surged 12% against the dollar, adding to a 1% increase in March.
This rally is supported by capital inflows and consecutive interest rate hikes, helping to recover from significant losses following two devaluations since last June, triggered by the government easing currency controls.
Goldman Sachs economists, who previously forecasted in February that the Naira would strengthen to 1,200 per Dollar in 2024, now anticipate it could surpass this level due to aggressive measures by the Central Bank of Nigeria (CBN) including a total of 600 basis points in interest rate increases during policy meetings in February and March.
These initiatives have alleviated the local Dollar shortage, reducing volatility and the reliance on parallel markets.
Andrew Matheny of Goldman Sachs notes, “This trend likely has further to run; we could see it reach N1,000 or even dip below,” highlighting the promising six weeks since their initial prediction, which has seen sustained policy efforts.
Goldman Sachs predicted good things, and the Naira got stronger against the Dollar.
On Friday, it closed at N1,142.38 per Dollar, up from N1,230.61 on Monday, a significant jump. On the unofficial market, it closed at N1,150 per dollar, a big increase from N1,240 on Monday.
Trading volume also went up, reaching $281.34 million on Friday compared to $125.55 million on Monday. The highest rate on Friday was N1,265, and the lowest was N1,100.
President Tinubu’s bold leadership and decisive reforms have birthed this economic resurgence. Since taking office in May, Tinubu and his ACE team of Adedeji, Cardoso and Edun have implemented significant changes, including eliminating fuel subsidies, to revitalise Nigeria’s economic landscape.
These reforms have laid a strong foundation for sustainable growth and stability, showcasing President Tinubu’s commitment to addressing long-standing economic challenges and steering Nigeria towards a prosperous future.
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