Emmanuel OchayiThe Naira continues to struggle against the Dollar, leaving many Nigerians wondering what will happen next. Last week, the black market rate for the Dollar ranged between N1580 and N1590, while the Central Bank of Nigeria (CBN) maintained a lower official rate, peaking at N1545. The difference between these rates shows the ongoing instability in the forex market.
Many factors influence the Naira’s value, including the government’s forex policies, crude oil earnings, and market speculations. Recently, the government’s Naira-for-crude deal with Dangote Refinery hit a roadblock, adding to market uncertainties. Traders are now watching closely to see whether the government will resume the agreement or shift its forex strategies.
Join our WhatsApp ChannelThis week, the Naira’s performance will be shaped by recent government decisions, market trends, and forex availability. We spoke with financial experts to understand what to expect in the coming days.
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How Did the Naira Perform Last Week?
Last week’s trading session showed that the Naira remained under pressure. The black market exchange rate stayed around N1580 to N1590, while the CBN’s official rate fluctuated between N1526 and N1545. These figures indicate that the black market still dominates forex transactions in Nigeria, as many businesses and individuals struggle to access dollars through official channels.
One major development last week was Dangote Refinery’s decision to stop selling petroleum products in Naira, citing difficulties in securing crude oil. This move forced the government to reconsider its forex policies, which could impact the Naira’s strength in the coming weeks.
Will the Naira Strengthen or Weaken This Week?
To understand what to expect, we spoke to two financial experts: David Akinwale, an independent forex analyst, and Chioma Okafor, an economist specializing in currency markets. They provided their insights on the possible movement of the Naira this week.
According to David Akinwale, market trends indicate that the Naira may weaken further if the government does not provide a clear forex policy. “We are seeing increasing pressure on the Naira because demand for dollars remains high while supply is low. The halt in the Naira-for-crude deal has made investors more cautious. If the government does not quickly address these issues, we could see the Naira hit N1600 per dollar in the black market,” he said.
However, Chioma Okafor believes that the Naira might see some stability if the government takes decisive action. “The CBN is expected to announce new measures to boost forex supply. If the central bank can increase liquidity through interventions, we might see the Naira hold its ground around N1580 to N1590. The official rate may also stabilize between N1530 and N1550,” she explained.
What Are the Key Factors Affecting the Naira?
Several factors will determine whether the Naira strengthens or weakens this week. One major issue is the availability of forex. The government’s commitment to foreign creditors through crude-backed loans limits the amount of forex available for local businesses. Unless there is an improvement in crude exports or foreign reserves, the Naira may continue to struggle.
Another factor is investor confidence. With Dangote Refinery no longer accepting Naira for crude purchases, businesses relying on locally refined petroleum products may face increased costs. This could drive further demand for dollars, pushing the exchange rate higher.
Government intervention is also crucial. If the CBN implements new policies to stabilize the forex market, such as increasing dollar supply to commercial banks, it could reduce reliance on the black market and support the Naira.
What Should Nigerians Expect This Week?
Given the current market conditions and expert predictions, Nigerians should prepare for continued volatility in the forex market.
If the government successfully revives the Naira-for-crude arrangement or boosts dollar supply, the Naira might stabilize between N1580 and N1590 in the black market, with the official rate holding between N1530 and N1550.
However, if forex supply remains tight and demand for dollars increases, the Naira could weaken further, potentially crossing ₦1600 per dollar. This would lead to higher prices for imported goods and increased economic uncertainty.
For businesses and individuals needing forex, experts recommend closely monitoring government policies and market trends to make informed financial decisions. The forex market remains unpredictable, and any major policy shift could impact exchange rates significantly.
The Naira’s performance this week will depend on forex availability, government policies, and investor confidence. While some experts believe the Nigerian currency could stabilize if the CBN acts quickly, others warn that further depreciation is possible if forex scarcity continues. Nigerians should stay informed about market developments and be prepared for potential fluctuations in the exchange rate.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
