Fitch Ratings Predicts Naira Could Reach 1450 Against Dollar by December

Fitch Ratings, an international credit rating agency, has predicted that the Nigerian currency will end the year at 1,450 to the American dollar.

Director of Fitch Ratings’ Middle East and Africa sovereigns, Gaimin Nonyane, announced this on Tuesday at a rating webinar focused on Nigeria and Egypt. 

Fitch Ratings Naira Prediction

Nonyane expressed her belief in naira fluctuation. She highlighted that since it began floating in June 2023, there is an expectation that the volatility will decline by the third quarter of 2024. 

She said, “The Naira is still finding its feet. It is still in price discovery mode. So we would expect a lot of volatility in the near term. However, as I just mentioned, there is the expectation of multilateral donor funding coming in Q3 this year in addition to improved oil receipts. So that should help to reduce volatility somewhat by Q3 this year.”

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The organization sees a way to always strengthen current account surpluses and create a lasting recovery in the foreign exchange position of the CBN.

Speaking further, Nonyane stated that as of right now, the current account surplus is small. This is less than 1% of GDP and is still not substantial.

She also proposed an increased foreign exchange market resilience and a long-term decline in inflation. She urged that to result in an upgrade, there needs to be greater lobbying for local non-oil earnings. 

Fitch Ratings Prediction on Oil Sector

Fitch Ratings also predicted recovery in the oil sector in the short term to support the FX demands.

It stated, “However, we do expect a recovery in the oil sector to support the current account over the short term. We also expect the oil refining capacity to increase over the short term as the Dangote plant ramps up capacity.”