'No more N1k/$' - CBN sets new exchange rate, inflation targets for Nigeria as naira crashes

The Central Bank of Nigeria (CBN) declared on Thursday, November 15, 2023, in Abuja that the rising exchange rates in Nigeria will reduce in 2024.

The bank also forecasted less earnings from oil exports in the 2024 fiscal year, declaring that total trade from the Nigerian Forex market stood at N18.804 billion in Q3 of 2023.

NNPC GCEO, Kyari speaks on Tinubu’s govt crude oil production, price target for 2024 Olayemi Cardoso, the CBN Governor, disclosed this during his presentation to the National Assembly Joint Committee on Banking, Insurance, and Other Financial Institutions.

The CBN boss explained that the outlook for Nigeria’s economy in the coming year is positive as both inflation and exchange rates would resist fluctuating pressures and eventually stabilize.

Cardoso said: “Inflationary pressures may persist in the short-term but are expected to decline in 2024. Exchange rate pressures are also expected to reduce significantly with the smooth functioning of the foreign exchange market.”

He told the committee that the exchange rate unification in June 2023 brought a new approach to FX management, reducing arbitrage, rent-seeking behaviours, and speculation in the FX market.

“The policy aims at creating a market where the demand and supply of foreign exchange determine the exchange rate.

“The premium has narrowed, and our focus on increasing the autonomous FX supply would lead to more stability and further narrowing of the premium,” he said.

The Nation reports that Cardoso said the bank expects less revenue from oil due to a production limit projection of 1.78mbpd in 2024, stating that the OPEC-approved quota for Nigeria is 1.8mbpd, higher than the 2024 budget assumption.

Naira plunges in the black market Cardoso’s statement comes as the Nigerian currency plunged to N1,260 per dollar in the black market on Thursday, November 14, 2023.

The plunge comes as buyers flooded the black market, searching for the US greenback following strict orders imposed by CBN on banks for currency forex trade.

However, the naira recovered marginally in the official exchange rate market, trading at N901.41 on Thursday, November 14, 2023, from N904.65 to a dollar it traded on Wednesday, November 13, 2023.