A US multinational financial services firm, JP Morgan, has projected that the naira would trade at about N850 to the dollar before the end of 2023.
The financial institution made the projection on Wednesday in its report titled “Nigeria local markets strategy: Getting set for re-opening”.
According to JP Morgan, achieving the N850/$ foreign exchange rate will require a combination of tighter policy, more attractive rates, and FX levels that discourage additional dollarisation while also attracting some foreign capital.
The firm said the recent efforts to restore a flexible FX regime may be sustained given the willingness to accompany it with tighter monetary conditions.
“The interbank FX rate has risen in recent days to over 900, from 750, thereby significantly closing the gap to the parallel rate which is now just above 1000,” JP Morgan said.
“We expect USD/NGN to eventually move lower towards 850 by year-end as the combination of tighter policy, as well as more attractive rates and FX levels deter incremental dollarization and perhaps attracts some foreign capital.”
