LAGOS, Nigeria (VOICE OF NAIJA)-Global investment banking, securities, and investment management firm, Goldman Sachs Group, Inc., has acknowledged the recent strength of the Naira, ranking it among the best-performing currencies globally.
Goldman Sachs, originally forecasting a year-end 2024 Naira-dollar exchange rate of 1,200, now anticipates the Nigerian currency could potentially reach or even dip below 1,000 to a dollar, contingent upon sustained economic reform efforts by the authorities.
Goldman Sachs attributes its positive outlook to capital inflows and interest rate adjustments, which have helped the Naira recover from losses caused by two devaluations since June, following the government’s decision to ease currency controls.
Goldman Sachs Group Inc. is a respected multinational investment bank and financial services firm known for its wide array of financial services.Economist Andrew Matheny from Goldman Sachs suggested that the Naira could potentially reach or even fall below 1,000 to the dollar.
READ ALSO: Naira Stability to Attract Manufacturers – Adedipe
“This probably can run further; we would see an extension of the move to 1,000 and maybe even sub-1,000,” Matheny said in an interview.Since Goldman’s call in February, “six weeks have gone by and they’re continuing to hold the line, so that’s encouraging,” he said.
Two successive interest rate hikes, totaling 600 basis points, have encouraged capital inflows and moderated inflation.
April witnessed a 12% appreciation against the dollar, adding to a 1% gain observed in March.
These measures, according to the firm, “have alleviated the dollar shortage, reducing volatility and reliance on the black market.
Matheny underscored the positive trend since Goldman Sachs’ initial forecast, pointing out the consistent policy measures in place.
READ ALSO: Naira’s Positive Rally Against the Dollar: A Promising Outlook or a Temporary Respite?
The report credits President Tinubu’s decisive leadership and the work of his economic team anchored around the ACE team – Zacheus Adedeji, chairman of the Federal Inland Revenue Service; Olayemi Cardoso, CBN Governor; and Olawale Edun, Minister of Finance/Coordinating Minister of the Economy) for these positive changes and reforms like eliminating fuel subsidies which aims to revitalise the economy.
Goldman Sachs’ optimistic forecast signals confidence in continuous growth and stability during President Tinubu’s administration.