Naira Reaches 5-Month High Against Dollar

AS of late Sunday, the Naira had seen a notable increase vs the US dollar, breaking through key resistance levels to trade below N1,000 in several black market segments.

This performance coincides with increased geopolitical tensions around the world and is in line with earlier estimates made by Goldman Sachs.

Economists from the US investment firm Goldman Sachs stated that “the Naira's current bullish momentum is projected to persist, potentially pushing the exchange rate below N1000 per US dollar in the upcoming months.”

The Naira's value has been rising after experiencing significant devaluations since last June, during a volatile period. The Nigerian financial authorities' efforts, which have included several interest rate increases that are currently capped at 24.75% as well as calculated foreign exchange interventions, have significantly aided in this stabilization.

“The recovery of the Naira from its prior losses has been largely attributed to the Central Bank of Nigeria's (CBN) aggressive monetary policy adjustments and the implementation of new market strategies,” a CBN spokesperson said at the most recent Monetary Policy Committee (MPC) meeting.

Furthermore, changes in the geopolitical environment have an impact on market trends. The recent attack on Israel by Iran prompted people to flee, strengthening the US dollar's value relative to other currencies. After initial advances, the dollar stabilized, partly assuaging market concerns as Israeli officials indicated no immediate preparations for reprisal.