Goldman Sachs Analysts Predict Naira to Appreciate to N1200 per US Dollar in Twelve Months
In a recent analysis of Nigeria’s economic landscape, Goldman Sachs analysts Andrew Matheny and Bojosi Morule have made a bold prediction – the Naira is set to appreciate to N1200 per US dollar within the next twelve months. This forecast comes as a ray of hope amidst the country’s foreign exchange crisis, with the analysts backing the Nigerian government’s recent monetary policy efforts to rescue the undervalued currency.
According to Matheny and Morule, the Naira is currently trading at a historically low level when compared to its Real Effective Exchange Rate (REER). They point out that the country’s current account surplus was at +3.5% of GDP in the third quarter of 2023, and with the recent foreign exchange movements and import compression, they expect it to rise above +5.0%. This, they believe, will lead to the Naira’s undervaluation and eventual appreciation to N1200 per US dollar in the coming year.
The Naira’s current exchange rate stands at N1627.40 per USD as reported by Media Talk Africa on Friday at the FMDQ official exchange market. The Central Bank of Nigeria has been proactive in implementing various monetary policies to stabilize the currency, including the recent draft guidelines for Bureau de Change operators.
However, the regulatory environment in Nigeria has not been favorable for all financial entities, as evidenced by Binance’s decision to discontinue Naira transactions due to government clampdown on cryptocurrency activities.
As Nigeria navigates through its economic challenges, the forecasted appreciation of the Naira by Goldman Sachs analysts provides a glimmer of hope for a brighter future. Stay tuned as the country’s monetary policies continue to evolve in response to the ever-changing global economic landscape.
