• Friday, June 21, 2024
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Naira to stabilise at 1,350-1,450/$ – Bismarck Rewane

Bismarck Rewane

Bismarck Rewane, the chief executive officer of Financial Derivatives Company has predicted that the exchange rate will stabilize around N1,350-1,450 per US dollars in the next 12 months.

Rewane made this known in a publication seen by BusinessDay titled “The Nigerian Economy 2024: One Year After, Are You Better Off Today?”

In his outlook for the next twelve months he said: “Exchange rate to stabilize around N1,350 – 1,450/$ rate”.

The naira has continued to fall against the US dollars despite various policies and interventions by the Central Bank of Nigeria (CBN).

The CBN delivered a jumbo rate hike, jacking up the country’s lending rate from 18.75 percent it stood last July to 26.25 percent in March, totalling a 750 basis points in a bold move to aid the battered naira and tame the stubbornly high inflation.

Nigeria’s lending rate was increased by 150 basis points to 26.25 percent, marking the third straight time the rate will be hiked this year.

The Monetary Policy Committee had in February raised the benchmark interest rates by 400 basis points to 22.75 percent and again increased rates in March by another 200 bps, bringing the country’s interest rates t0 24.75 percent.

Following the recent rate hike, the naira jumped to a one-month high of N1,173.88 last Tuesday but the local currency lost steam as it fell to N1,329.65/$ on Wednesday while sliding by 30.05% on Thursday and weakened to N1,485.99 on Friday nearing the year-to-date high of N1,630.

The leading economist also noted that the country’s 28-year high inflation rate will begin to decline and may hit 18 percent by 2025.

Nigeria’s headline inflation reached its highest in nearly three decades in April at 33.69 percent piling pressure on households’ needs. Food inflation also accelerated to 40.53 percent, leading to a pronounced cost of living crisis.

The FDC chief executive also revealed that Nigeria may regain its position as Africa’s largest economy by 2028.

Nigeria, which has held the title of “Africa’s largest economy” since the Gross Domestic Product rebasing in 2013 is projected to have a total GDP of $253 billion in 2024, primarily due to the devaluation of the naira thereby slipping to the fourth largest economy.

Based on the International Monetary Fund’s estimates, Nigeria’s GDP in US Dollars declined from $477 billion in 2022, to $375 billion in 2023, and it is estimated to drop to $253 billion in 2024.

“Policy changes, institutional reforms, and new borrowings will lead to positive and faster growth in the 2025/26 period,” Rewane said.