Naira strengthens to N1,000 against Dollar

The value of the naira gained strength midday on Monday, opening at N1,130 to the dollar but rising to N1,000 by noon at the parallel market.

This surge comes as traders anticipate another round of dollar sales to Bureau de Change (BDC) operators this week.

Last week, the Central Bank of Nigeria (CBN) offered $15.88 million to BDC operators at N1,101 to the dollar, boosting the naira’s value on the streets.

The CBN typically sells dollars to BDCs at the lower band of rates quoted on the Nigeria Autonomous Foreign Exchange Market (NAFEM).

Last week, the naira’s value fluctuated between N1,265 and N1,100 to the dollar.

In anticipation of another liquidity injection from the apex bank, the value of the naira strengthened from its opening rate of N1,130 to the dollar to N1,000 by midday.

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This aligns with the forecast of US Bank Goldman Sachs, which projected that the naira would trade at N1,000 and be among the best-performing currencies globally.

Goldman Sachs economists had earlier predicted that the naira would strengthen to N1,200 per dollar this year, citing measures by the central bank to ease the scarcity of dollars and stabilize the currency market.

Goldman’s Andrew Matheny told Bloomberg Newswire in an interview that “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.”

However, Goldman maintains its 12-month forecast for the naira at 1,200 per dollar, acknowledging uncertainties around the sustainability of the reform efforts by Nigerian authorities.

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