The Nigerian naira is expected to strengthen against the US dollar over the course of the next 12 months, according to global investment firm Goldman Sachs.
Based on policy adjustments that might aid in the currency’s recovery, the bank predicted that the short-term exchange rate of the local currency to the US dollar would be 1200.
The New York-based financial institution highlighted recent upward interest rate adjustments by Nigeria’s monetary authorities and a recent N1.6 trillion bill auction by the central bank in a research note released late Thursday.
The institution interpreted these events as signs that the nation is reversing a previous unconventional policy regime that restricted the naira’s ability to trade freely.
“These developments have prompted us to shift to a constructive outlook for the Naira, which our FX strategists expect to appreciate to NGN 1200 vs. the USD in 12 months,” Goldman Sachs said.
“That said, the policy steps implemented to date are only a first step in the right direction, and we think more follow-through is required to achieve a durable macro stabilisation.” [CONTINUE READING HERE]
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