Nigeria is under increasing pressure due to certain dealers’ quotes of a bid price of N900 per dollar.
By 2027, according to the Economist Intelligence Unit (EIU), the naira will exceed the $1,000 threshold.
A recent research by the EIU predicts that the average rate would be N815 to $1 in 2024 and N1,018 to $1 by the end of 2027, with a margin of 10-15% against the black market over that time.
On July 14, 2023, the naira crossed the 800/$ milestone at Nigeria’s official foreign exchange market, the Investors and Exporters (I&E) fx window. The dollar was trading about N870 in the parallel market, sometimes known as the black market, as of Monday
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The amount was made up of autonomous FX inflow of $10.0 billion, which was down 12% q/q, and CBN-facilitated FX inflow of $7.2 billion, which was up +15% q/q.
The FX inflow in Q1 2023 was the lowest quarterly inflow since Q1 2017, except Q3 2022 when it reached a low of $16.9 billion.
The decline in foreign exchange inflow since the first quarter of 2020 is mostly related to structural problems, such as the inadequate addition of proceeds from crude oil sales to gross official reserves.
Furthermore, until recently, the monetary authorities’ stringent FX policies restricted the free movement of FX out of the nation and prevented foreign portfolio investors from bringing in more money, according to analysts at FBN Quest.
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