'We expect' - UK firm sets new exchange rate for the naira against dollar

The research and analysis firm, the Economist Intelligence Unit (EIU), has predicted a new exchange rate for the naira against the US dollar in the coming year.

The company stated that Nigeria's currency's new forecasted FX rate should be effective from an estimated N848 to one US dollar at the end of 2024, marking a period of relative stability, stating that the parallel market rate may likely remain volatile.

Naira to officially stabilise at N884 per dollar

The EIU's estimate is for the official rate as directive by the Central Bank of Nigeria (CBN), which has pegged the currency at N887 to a dollar.

The company explained that despite market reforms hurriedly implemented by the Nigerian government in June this year to restore normalcy and reduce the pressure on the naira, the CBN is unlikely to clear the Forex backlog blamed for naira's woes entirely.

The EIU predicted that the pressure on the naira would ease in 2024 without CBN implementing harsh measures.

It said: "Foreign exchange rules being introduced and the possibility of an oil-backed loan could reassure investors and allow the backlog to be entirely cleared. A current account surplus will be another support. The political need for currency stability would probably preclude a functioning managed float."

BusinessDay quotes the EIU as stressing the impact that oil production from the Dangote Refinery could have on creating a current account, causing a surplus.