Nigeria’s currency, the naira, has recorded significant gains against the dollar in recent months.
Gatekeepers News reports that in April, the Naira surged by 12% against the US dollar, following a 1% increase in March.
This improvement is a result of effective policy management, which has increased capital inflows and consecutive interest rate hikes.
The naira’s rally has enabled it to recover from significant losses following two devaluations since last June, triggered by the government easing currency controls.
Goldman Sachs economists initially predicted in February that the naira would strengthen to 1,200 per dollar in 2024, but they now anticipate it could surpass that level due to the central bank’s aggressive measures.
During policy meetings held in February and March, the central bank implemented a total of 600 basis points in interest rate increases, which has helped alleviate the local dollar shortage, reduced volatility, and decreased reliance on parallel markets.
Overall, the naira’s performance is poised to continue, as long as effective policy management is maintained.
Andrew Matheny of Goldman Sachs notes, “This trend likely has further to run; we could see it reach 1,000 or even dip below,” highlighting the promising six weeks since their initial prediction, which has seen sustained policy efforts.
President Tinubu’s bold leadership and decisive reforms have birthed this economic resurgence. Since taking office in May, Tinubu and his ACE team have implemented significant changes, including eliminating fuel subsidies, to revitalise Nigeria’s economic landscape.
These reforms have laid a strong foundation for sustainable growth and stability, showcasing President Tinubu’s commitment to addressing long-standing economic challenges and steering Nigeria towards a prosperous future.
