New Report Predicts Dollar Hoarders To Lose Significantly In Black Market

Persons hoarding Dollars and betting against the Naira are set for a shock in 2023, according to credit rating agency, Agusto & Co, as the firm predicted the Naira will gain big against the United States currency.

In a report titled ‘2023 Outlook: Nigeria, a Nation on the Precipice’, Agusto predicted that the exchange rate between both currencies will drop to N650-N680/$1 in the black market.

When compared to the N753.41 kobo/$1 exchange rate in the Bureau De Change window as of Monday, 13 February 2023, the Dollar rate will depreciate by -9.74 per cent this year. 

Recall that last year, Prime Business Africa reported that Dollar hoarders gained significantly due to policies of the Central Bank of Nigeria (CBN).

This publication revealed that Dollar gained 31.39 per cent in the black market, with the exchange rate rising from the N565/$1 it closed 2021 with, to N745/$1 in the first week of 2022. 

However, Agusto has predicted last year’s performance of the Dollar will not be repeating itself in 2023, indicating USD hoarders risk losing out this year, as the American greenback will be N73.41 kobo cheaper in value based on Monday’s rate. 

Agusto reported that the depreciation of the exchange rate in the black market will be caused by a projected hike in the Dollar rate offered in the official market. 

According to the credit rating agency, the exchange rate between the Dollar and the Naira was predicted to rise to N480-N500/$1.

The report said the hike in the exchange rate in the official market will compel people to abandon the black market for the Investors and Exporters window. 

Agusto’s projection is in line with the prediction made by the Bank of America Sub-Saharan Africa’s Tatonga Rusike in 2022. 

Rusike had stated that the Naira will weaken to the Dollar, predicting the exchange rate between both currencies will appreciate to N520/$1. 

“We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as 520 per USD,” Rusike said. 

He made this known in a note to clients: “While the naira will come under increasing pressure due to limited government external borrowing, devaluation is unlikely to happen until after the February 2023 presidential elections.”