Naira Gains Against Dollar Amid N900 Exchange Rate Projection

The exchange rate between the Dollar and the Naira depreciated by –0.05 per cent on Thursday, 23 February 2023, the FMDQ Securities disclosed.

According to data obtained from FMDQ, which monitors the dollar rate in the official market, it was noted that the cost dropped by N0.27 kobo. 

This resulted in the exchange rate between the Nigerian and United States currencies closing Thursday’s foreign exchange trade at N461.33/$1. 

During the trading session of the official window, it was learnt that the Dollar rate rose as high as N462/$1 and fell as low as N446/$1 before closing at N461.33. 

Prime Business Africa notes that the foreign exchange rate had closed trading in the Investors’ and Exporters’ window at N461.60 a day before. 

In the black market on Friday, 24 February 2023, the Dollar rate hovered at an average of N760, as the Naira appreciated by 0.65 per cent when compared to the N765 reported the previous day by Nairametrics. 

While the exchange rate in the black market appreciated on Friday, an independent tax and business advisory firm, Andersen, has warned that the rate could hit as high as N900 in 2023.

Andersen said various factors are playing against the Naira that will weaken the Nigerian currency this year. It listed global investors’ snub and the country’s dependence on importation among the factors. 

Addressing the exchange rate situation in Nigeria, Andersen wrote: “In 2022, the value of the naira was relatively more stable in the official market than in the parallel market thereby widening the premium between the two exchange rate windows. This was due to the heightened demand pressure spurred by FX illiquidity.  

“FX excess demand pressure is expected to continue in 2023 fuelled by varying factors such as elevated global interest rates attracting portfolio investments away from Nigeria; a structurally import-dependent economy; currency speculations if the gap between official and parallel market rates are not closed; etc, which will make the naira to remain pressured in the foreign exchange windows.”