Nigeria’s prolonged battle to stabilize its currency is finally bearing fruit, with analysts now forecasting the battered Naira could rebound sharply before the end of the year.
Analysts at Goldman Sachs Group Inc., Citigroup Inc., and Standard Chartered Plc see the Naira advancing by as much as 25% against the dollar this year, as jumbo interest-rate increases and other steps to attract foreign capital yield results.
The Naira has been devalued twice since June after newly-elected President Bola Tinubu ended Nigeria’s longstanding practice of fixing the exchange rate, alongside other reforms to lure foreign money and boost the economy.
While the process has been painful, with the currency sliding 70% against the greenback to a low of 1,627 earlier this month, the Naira has steadied in recent days. Further, the gap between the official and unofficial market rates has narrowed sharply.
Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, sees the Naira ending 2024 in a 1,200-1,300 per dollar range. “In more benign conditions, we could test even 1,100 Naira a dollar or lower,” she said.
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