Naira Finally Sells for N1,000/$ as BDCs Set to Get New Dollars Supply From CBN

• The naira traded at N1,000 to the dollar in the unofficial market by Monday afternoon
• This is as analysts anticipated another wave of supply of the dollar into the market
• The new development is in line with US Bank Goldman Sachs' prediction that the naira will trade at N1,000/$

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The value of the naira strengthened around midday on Monday after opening at N1,130 to the dollar in the morning.

This is as traders expect another wave of dollar sales to Bureau de Change (BDC) operators this week from the Central Bank of Nigeria (CBN).

Recall that the value of the naira on the streets increased last Monday due to an offer made by the CBN to BDC operators of $15.88 million at a rate of N1,101 to the dollar.

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In a similar operation, Leadership reported that the naira was trading N1,000 to the dollar on the parallel or unofficial market by Monday, April 15, 2024, in anticipation of new supply.

Naira gains further

The development is consistent with US Bank Goldman Sachs' prediction that the naira will trade at N1,000 to the dollar.

Goldman Sachs Group Inc. predicted the naira to rank among the world's best-performing currencies.

Goldman economists, who forecast in February that the naira would appreciate N1,200 per dollar this year, now see it going beyond that mark to gain further following a slew of central bank actions.

These included measures to alleviate the local currency scarcity that exacerbated volatility and drove businesses to the parallel market, along with a cumulative interest rate rise of 600 basis points during policy sessions in February and March.

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Goldman’s Andrew Matheny told Bloomberg Newswire in an interview:

“This probably can run further; we would see an extension of the move to 1,000 and maybe even sub-1,000, six weeks have gone by and they’re continuing to hold the line, so that’s encouraging.”

The group sees risks to its optimistic 12-month prediction, but it still keeps the naira at 1,200 per dollar due to doubt about the authorities' capacity to sustain the pace of reform.

Naira to dollar exchange rate earlier

Nigerian currency has depreciated against the US dollar in the official foreign exchange (FX) market after two sessions of positive performance, Legit.ng reported.

Data from FMDQ securities showed that the naira closed against the US dollar at N1,433.89/$1 on Tuesday, February 7, 2023, at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Checks by Legit.ng further showed that some participants on Tuesday, February 6, paid as high as N1,519.78

Source: Legit.ng