Following the latest CBN dollar to naira exchange rate, GoldenNewsNg reports that Dollar to Naira Hit 1,018. See Latest CBN News below.
Economists at the Economist Intelligence Unit (EIU) have projected that the Nigerian currency, the Naira, is expected to face further challenges and decline to as low as N1,018 per dollar by the end of 2027. The forecast is based on the current state of the Nigerian economy, with rising inflation reaching a 17-year high and concerns about the Central Bank of Nigeria’s (CBN) lack of experience in handling a flexible exchange rate system.
The EIU report highlights that in 2024, the average exchange rate is predicted to be N815 to US$1 before sliding to N1,018 to US$1 by the close of 2027. During this period, the black market exchange rate is anticipated to experience a spread of 10-15 percent against the official rate.
The report states, “Along with high and rising inflation, the naira will be under significant pressure in the near term.”
EIU also expects that the Nigerian government, specifically the CBN, will likely revert to a more controlled exchange rate system as a measure to halt the Naira’s further depreciation. The CBN’s lack of experience in managing a flexible exchange rate system is cited as one of the reasons behind this expected shift in policy.
The research and analytical firm emphasizes that there is currently a scarcity of foreign currency in the country, particularly in meeting demands for foreign exchange through Form A and M. This scarcity, coupled with speculators capitalizing on the situation, could lead the CBN to increase its involvement and intervention in the market, especially given that a significant portion of their foreign reserves (approximately 98 percent) is in cash.
On another note, the Central Bank of Nigeria has responded to reports that it withdrew licenses from over 2,000 Bureau de Change operators amid the ongoing depreciation of the Naira at both the official and black markets.
The situation presents significant challenges for Nigeria’s economy, and the actions of the CBN and government policies will likely play a crucial role in determining the Naira’s future trajectory.
