The current naira exchange rate of 471.92 naira to the dollar may likely need to be adjusted to about N700 to N750, closer to the current black market rate, JPMorgan said in an investment note on May 31.
The naira has closed lower for three consecutive days, its longest streak of losses since May 12. Analysts expect that the currency could trade anywhere between 650 and 750 to the dollar as Nigeria allows it to trade more freely.
A naira at that level, combined with President Bola Tinubu’s decision to remove fuel subsidy “means the government does not have (to) borrow as much, just to pay interest on debt,” Head of strategy at FIM Partners, Charlie Robertson, said in a series of posts on Twitter.
Wale Edun, an influential member of Tinubu’s advisory board, told Bloomberg by phone on Monday that the unification of exchange rates was “imminent”, DailyTrust reports.
He noted that, “I would say it would have to be done within a quarter rather than within a year.”
Under Emefiele, Nigeria’s central bank offered the dollar through several windows at tightly controlled rates, with little liquidity to businesses and individuals. This forced many to the black market, where the dollar traded more freely but at about a 60 per cent premium to the official rate.
