BusinessMoneyNewsNigeriaNaira Seen Weakening to N1,450-$1 by Year-End, Says Fitch Ratings

International credit rating agency Fitch Ratings has projected a decline in the value of the Nigerian naira by December 2024. The agency forecast the naira to settle around N1,450 to the US Dollar by year-end.

This projection comes as the naira currently trades around N1,488 to the USD on the official market and N1,500 at the parallel market (as of 5 June 2024) amidst ongoing volatility in the Nigerian foreign exchange market. The naira has been on a fluctuating trajectory since it was officially floated 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 stabilising trend towards the latter part of 2024.

“We project that it will average about N1,200/US$1 this year and end the year-round N1,450/US$1. And in terms of next year, we see a gradual depreciation but it also depends largely on the foreign exchange reforms momentum. So, this is our baseline scenario on the basis that the momentum continues at the current pace,” the director at Fitch Ratings said.

Fitch Ratings based their year-end forecast on the assumption that Nigeria’s foreign exchange reforms will continue at their current pace.

Nonyane highlighted sustained stability in the Central Bank of Nigeria’s, CBN, foreign exchange reserves and consistent current account surpluses as factors that could contribute to a firmer naira.