The naira strengthened against major currencies on Monday the greenback saw an increased safe-haven demand, in the wake of an Iranian strike on Israel, putting it at more than five-month highs.
Naira breaks key resistance.
Goldman Sachs projection became a reality when the local currency exchanged at below N1000 at some segments of the parallel market as of late Sunday.
The American investment bank’s economists stated that the Naira’s bullish momentum on the foreign exchange market will likely cause it to trade for less than N1,000 per US dollar in the coming months.
The tier 1 investment bank claimed that the rally in Nigerian currency helped recover from large losses after two devaluations since last June by being bolstered by capital inflows and successive interest rate hikes.
Recall in March, Goldman Sachs earlier projected that the Naira would appreciate to N1,200 per Dollar in
- The top bank has implemented several policy initiatives in recent months to bring stability to the foreign exchange market.
The CBN increased interest rates to 24.75% at the most recent meeting of the Monetary Policy Committee
(MPC), which helped it recover losses from the two devaluations that occurred since June of last year.
Further gains for the naira result from the CBN’s ongoing intervention, which involves selling foreign which involves selling foreign exchange to Bureau De Change operators at a revised rate.
The market anticipates higher inflows of US dollars from the sale of foreign currency bonds in the second quarter as revealed by Finance Minister Wale Edun. This came when the government offered high-yield short-term debt products at a premium to entice overseas capital into the economy.
Nigeria’s gross foreign reserves have decreased despite a persistent increase in the world commodities market.
Via: @nairametrics
