Fakoyejo OlalekanThe Federal Government has projected that the United States currency, dollar, will exchange in naira at a rate of N435.57 next year, as the naira remains weak in the black market.
This indicates the devaluation of Nigeria’s currency will continue into 2023, depreciating by at least 1.14%, when compared to the exchange rate of N429.38 that the dollar traded at the official market on Wednesday.
Note that a day before, the naira had traded at N430.67 on the Investors and Exporters window, according to data from the FMDQ Securities. This reflects the naira appreciated against the dollar, but in the parallel market, both currencies exchanged for N680.
However, in the longrun, the naira is estimated to exchange one dollar at N435.57 according to the 2023 budget circular call shared with Heads of Ministries, Departments & Agencies (MDA’s).
For its 2022 budget, the government had projected naira will exchange $1 at least round N410.15. The budget circular further estimated that both currencies will exchange at the rate of N435.92 in 2024.
Naira will, however, recover in 2025 according to the Federal Government, with expectation that one dollar should trade for N435.57, indicating pressure on the nation’s currency will drop.
Meanwhile, recall that Prime Business Africa had reported that the Bureau De Change operators had offered to partner with the Central Bank of Nigeria (CBN) to help strengthen naira against the dollar.
The BDC operators said the CBN’s decision to halt sales of foreign currencies with them is negatively affecting the value of Nigeria’s currency, and the solution is to resume selling of forex to Bureau De Change centers.
BDC President, Aminu Gwadabe, said, “It might sound counterintuitive, but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float. CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.
“Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira.” Gwadabe said.
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