Global Ratings Agency Forecasts Naira To Hit N1,450/$ By Year-End

Global Ratings Agency Forecasts Naira To Hit N1,450/$ By Year-End....KINDLY READ THE FULL STORY HERE▶

A global ratings agency has projected that the Nigerian naira will end the year at N1,450 to a dollar.

According to Fitch Ratings, despite the volatility experienced by the naira since its floatation in June 2023, fluctuations are expected to reduce by the third quarter (Q3) of 2024.

Gaimin Nonyane, director of Middle-East and Africa sovereigns at Fitch Ratings, revealed this during a post-sovereign rating webinar focused on Nigeria and Egypt.

“The naira is still finding its feet and is in a price discovery mode. We expect a lot of volatility in the near term,” Nonyane stated. “However, multilateral donor funding expected in Q3 this year, alongside improved oil receipts, should help reduce volatility by Q3.”

Nonyane projected that the naira would average around N1,200 per dollar this year and end the year at approximately N1,450 per dollar. Looking ahead, a gradual depreciation is anticipated, largely dependent on the momentum of foreign exchange reforms.

“Currently, the current account surplus is below one percent of GDP, which is not significant. Sustained reduction in inflation and greater stability in the foreign exchange market, alongside stronger mobilisation of domestic non-oil revenue, could lead to an upgrade in ratings,” she said.

Nonyane also highlighted that the low tax revenue base has contributed to the government’s high interest-to-revenue ratio, currently at 38 percent, which is significantly higher than the B rating median and is a key rating consideration.