Naira Races to Beat Goldman Sachs Forecast
The exchange rate appreciated further midweek as the Nigerian naira continued to claw back previous losses sustained in the forex markets. At the official window, the local currency gained 1.23% again to close at N1262.85 per US dollar.
Goldman Sachs predicted early in the first quarter that the exchange rate will settle around N1200 within 12 months. Barely a month into the prediction, the local currency has maintained positive traction at official and parallel markets due to improved foreign investors’ confidence.
The level of confidence exhibited continues to attract foreign currency inflows. Nigeria witnessed huge or sizeable foreign currency inflows over the last three months as the apex bank sold Treasury and OMO bills to foreign investors at higher rates.
On behalf of the Central Bank of Nigeria (CBN), Cordros Capital Limited also hinted that the Debt Management Office (DMO) raised foreign currency bonds to offset FX forward obligations.
All efforts put in place appear to be supporting massive appreciation of the local currency over the last few weeks. The apex bank has been able to reduce freehand previously enjoyed by currency traders in the alternative FX market.
With US dollar sales to the Bureau de Change (CBN) with a cap on FX spread, the black market rate has also been moving positively. Analysts said it is not clear whether CBN is selling $10,000 to the Bureau de Change per week or intermittently.
According to information obtained from FMDQ Securities Exchange today, the Naira strengthened by 1.23% in the forex market, ending at ₦1,262.85 per US dollar in the official market.
In the parallel market, the Naira closed at ₦1,274 to the US dollar following the elimination of spurious demand for invisible payments. The price of oil saw a positive trend in the global commodity market, with Brent crude rising by 0.38% to $89.62 per barrel and WTI crude rising by 0.36% to $85.75 per barrel. #Naira Races to Beat Goldman Sachs Forecast Naira Lost 11% as Banks Issue New Update on FX Spending
