BoA Predicts N680 To Dollar; $20bn Earning From Oil

The exchange rate of the naira will stabilize at N680 to the dollar by the end of the year, the Bank of America, BOA, has said.

The bank made this known on Thursday, according to BusinessDay newspapers.

The projection comes following the unification of the exchange rate by the Central Bank of Nigeria, CBN, last week, thus bringing to end years of segmentation in the official and parallel exchange rates.

According to the newspaper, the BOA said the value of naira will settle around N680 to the dollar by the end of the year, adding that the national currency has now been undervalued following the government’s recent foreign exchange policy.

The bank stated that the federal government should take critical steps, including ending oil theft in order to increase the nation’s foreign exchange earnings, adding that Nigeria’s crude production could rise to 1.6 million barrels per day, BPD in 12 to 18 months, from the current 1.2 million.

Higher oil exports and a liberalised import regime, the bank stated, could earn the country more than $22 billion in the medium term.  

The BOA said, “We now see a USDNGN fair value of 680 per USD (previously 580). However, USDNGN is likely to trade above this level, with year-end 700, and a return to 650-680 in early 2024.

“The caution is transition time, aligning rates and still to unlock more USD into the formal market will take some time. When the dust has settled, the value of the naira should be stronger and appreciating.

“With the current momentum, Tinubu’s next big move should be to reduce oil theft – by reforming the security sector and involving host communities near the pipelines.”