Victor Ezeja
Nigerian businesses have expressed optimism that after witnessing depreciation in the remaining months of 2024, the value of naira will rise in early 2025.
A recent survey conducted by the Central Bank of Nigeria (CBN) revealed that businesses expect the naira to continue depreciating in July and August up to the next three months before it starts appreciating in late 2024 or early 2025.
Join our WhatsApp ChannelThe CBN’s Business Expectation Survey, conducted from 15 and 19 July 2024, sampled 1,600 respondents from businesses across the country in three sectors – Industry, Services and Agriculture.
The local currency has depreciated by about 68 per cent in the last one year, being fallout of the foreign exchange reforms embarked on by the President Bola Tinubu-led administration. From about N460 in May 2023, it jumped to over N1,500 in July 2024. Floating the naira in the foreign exchange led to its devaluation.
The depreciation of the local currency has been a major contributor to the surging inflation in the country. The inflation rate had been on an upward spiral for 19 months, reaching a peak of 34.19 per cent in June 2023. It, however, eased in July to 33.40 per cent. The high inflation rate has resulted in high cost of living crisis as people grapple with high prices of things.
Prime Business Africa reports that the CBN has come up with a raft of monetary policy measures to stabilise the value of the naira including the injection of millions of dollars into the FX market in recent months. Despite that, the naira has continued to weaken.
However, the respondents to the CBN’s survey projected that the weak currency will begin to appreciate sometime in late December or early 2025.
“Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under review. Respondents also opined that the current inflation rate of 34.19 is too high,” the report stated.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
