International credit rating agency Fitch Ratings has projected a decline in the value of the Nigerian naira by December 2024. In a recent statement, the agency forecast the naira to settle around N1,450 to the U.S. dollar by year-end.
The forecast comes as the naira currently trades around N1,488 to the USD (as of June 5, 2024) amidst ongoing volatility in Nigeria’s foreign exchange market. The naira’s value has fluctuated significantly since its official float in June 2023.
Gaimin Nonyane, Director of Sovereigns at Fitch Ratings, attributed the projected depreciation to the naira still being “in price discovery mode.” Nonyane expects continued volatility in the near term but anticipates a stabilizing trend towards the latter part of the year.
Fitch based their forecast on the assumption that Nigeria’s foreign exchange reforms will maintain their current pace. However, they acknowledge uncertainties. While sustained stability in the Central Bank’s foreign exchange reserves and consistent current account surpluses could strengthen the naira, the actual trajectory depends heavily on the continued momentum of these reforms.
—Ezinwanne Onwuka reports for TruthNigeria from Abuja.
