Naira Could Trade Below ₦1,000/$ – Goldman Sachs

In a recent forecast by Goldman Sachs Group Inc., the naira, Nigeria’s currency, is anticipated to strengthen significantly, potentially trading below ₦1,000 to the dollar in the foreseeable future.

This optimistic outlook comes after a previous statement on March 10 by the renowned financial institution, projecting the naira to reach ₦1,200 per dollar within the next twelve months.

During an interview with Bloomberg on Friday, Andrew Matheny, an economist at Goldman Sachs, indicated that the naira might surpass earlier expectations by trading even lower than the projected ₦1,200 against the dollar.

He said, “This probably can run further; we would see an extension of the move to 1,000 and maybe even sub-1,000.”

Matheny said since Goldman’s February forecast, “six weeks have gone by and they’re continuing to hold the line, so that’s encouraging.”

The firm’s forecast comes amid a sustained rally of the naira at both parallel and official sections of the foreign exchange market.

On April 8, the local currency strengthened to ₦1,120 per dollar at the black market and ₦1,230 at the official window.

In the past months, the Central Bank of Nigeria (CBN) has taken measures to ensure the stability of the FX market.

The apex bank, on February 15, placed limits on the transfer of proceeds from crude exports by international oil companies (IOCs) to offshore parent company accounts.

On March 20, the CBN announced that all outstanding FX obligations had been successfully settled.

In addition, the regulator directed all banks to stop the use of foreign currency-denominated collaterals for naira loans.