The naira-dollar exchange rate is expected to remain stable until 2025 after stabilizing in the official foreign exchange (FX) market from July to December 2024.
Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise (CPPE), expressed this positive expectation in a 2024 economic review and a 2025 forecast.
The average rate was N907.1 in December 2023 and N1,455.59 in January 2024. By the end of the year, the official exchange rate at the Nigerian Foreign Exchange Market (NFEM) was N1,537.
This stability and a favorable forecast for 2025 are supported by a number of factors. Yusuf cited important advancements including Nigeria’s foreign reserves surpassing $40 billion and predicted that reserve accretion would continue to grow.
Furthermore, it is anticipated that actions such as the $2 billion Eurobond proceeds, a $500 million domestic dollar bond, and the CBN’s resolution of $7 billion in legacy forex commitments will strengthen the central bank’s ability to effectively operate in the forex market.
The influence of the newly operating Dangote and Port Harcourt refineries on import substitution is another game-changer.
Additionally, he saw a slow but steady revival in the non-oil export industry, which may help boost foreign exchange inflows.
Inflation is predicted to drop marginally in 2025 after skyrocketing to 34.2 percent in November 2024. Yusuf explained this likely easing by pointing to a decrease in exchange rate volatility, changes in geopolitics since Donald Trump took office again, and a potential stabilization of the world’s oil markets.
Yusuf warned that some inflationary pressures might still exist in 2025 despite these hopeful forecasts.
TimesNow.com.ng reported that as analysts predict greater foreign exchange inflows into the economy and a decline in the import of food and gasoline, the naira is set for a surprising recovery in 2025.
They predict that the upcoming year will see increased oil output, larger net capital inflows into the economy, and a decrease in the import of food and gasoline. They pointed out that the local currency is supported by all the facts.
According to Uche Uwaleke, head of Nasarawa State University’s Institute of Capital Market Studies, the forecast is a result of increasing fuel exports, which would provide foreign exchange earnings for the nation, and decreased imports of food and gasoline.
Source: TimesNow.com.ng
