In a dramatic turn of events, Nigeria’s currency, the naira, has taken the financial world by storm with a whopping 12% surge against the mighty US dollar in April, following a resilient 1% increase in March, reports Findwhosabi News.
This remarkable upswing comes on the heels of effective policy maneuvers, spearheaded by the Nigerian government, which have bolstered capital inflows and orchestrated consecutive interest rate hikes.
The naira’s stunning rally marks a triumphant recovery from the tumultuous aftermath of two devaluations since last June, sparked by the government’s decision to ease currency controls.
Initially, Goldman Sachs economists forecasted in February a strengthening of the naira to 1,200 per dollar by 2024. However, they now revise their predictions, envisioning an even more robust performance, fueled by the central bank’s aggressive measures.
In a bold move during policy meetings in February and March, the central bank executed a total of 600 basis points in interest rate hikes. This strategic maneuver not only alleviated the local dollar shortage but also tamed volatility and reduced dependence on parallel markets.
Forecasts suggest that the naira’s upward trajectory is far from over. Andrew Matheny of Goldman Sachs predicts, “This trend likely has further to run; we could see it reach 1,000 or even dip below,” underscoring the promising six-week journey since their initial projection, supported by sustained policy efforts.
Behind this economic resurgence stands President Tinubu, whose bold leadership and decisive reforms have breathed new life into Nigeria’s economic landscape. Since assuming office in May, Tinubu and his ACE team have spearheaded sweeping changes, including the elimination of fuel subsidies, aimed at revitalizing Nigeria’s economic fortunes.
These groundbreaking reforms have laid a robust foundation for sustainable growth and stability, underscoring President Tinubu’s unwavering commitment to tackling longstanding economic challenges and charting a course toward a prosperous future for Nigeria.