Naira Shows Stability in Official Market, Within Fitch Ratings Projection The Nigerian currency, the Naira, has maintained stability in the official foreign exchange market, trading within the range projected by Fitch Ratings. According to the Central Bank of Nigeria (CBN), the Naira closed at N436.05 to the US dollar on Monday, July 11th, 2023, a marginal depreciation of 0.1% from its previous close. This stability is in line with Fitch Ratings’ projection, which forecast a gradual depreciation of the Naira to N440 to the US dollar by the end of 2023. Fitch had attributed this depreciation to persistent foreign exchange shortages and rising inflation. The CBN has been intervening in the market through its weekly foreign exchange auctions to ensure liquidity and prevent excessive volatility. The bank has also adopted other measures to support the Naira, including restricting access to foreign exchange for certain imports. Analysts believe that the current stability in the official market is likely to continue in the near term, as the CBN continues to manage the foreign exchange supply and demand dynamics. They also note that the recent increase in global oil prices is providing some support for the Naira, as Nigeria is a major oil exporter. However, analysts warn that the currency could face pressure later in the year if the global economic outlook deteriorates or if there is a significant increase in demand for foreign exchange. The upcoming presidential elections in 2023 could also introduce some uncertainty into the market. Overall, the stability of the Naira in the official market is a positive sign for the Nigerian economy. It provides businesses with some predictability in their foreign exchange operations and helps to attract foreign investment. However, the CBN will need to continue to monitor the situation closely and adjust its policies as needed to ensure that the Naira remains stable in the long term.Headline: Nigerian Naira Remains Stable in Official Market, Aligns with Fitch Ratings ProjectionsHeadline: Nigerian Naira Remains Stable in Official Market, Aligns with Fitch Ratings Projections Paragraph 1: The Nigerian naira exhibited stability in the official market, aligning with Fitch Ratings projections, despite fluctuating around N1,500 against the US dollar in the parallel market. Meanwhile, the US dollar index surged to an eight-week high in the broader market. Paragraph 2: The naira briefly dipped below the support level of 1,500 naira on the black market due to increased demand for US dollars. However, rising oil revenues and funding from multilateral donors for the third quarter are anticipated to bolster the naira around the N1,500 mark. Paragraph 3: Fitch Ratings, an international credit rating agency, forecasts that the naira will reach 1,450 naira per dollar by year’s end. Paragraph 4: Naira Fundamentals Positive – In June, the naira demonstrated relative stability against the US dollar, trading within a narrow range of N1,473 to N1,485. – Its price fluctuations are at historic lows, attributed to the Central Bank of Nigeria’s hawkish stance. – The CBN has implemented monetary tightening measures and abandoned exchange rate caps to improve transparency and attract dollar inflows. Paragraph 5: To combat inflation and maintain the local currency’s value, the CBN raised interest rates to a record 26.25%. It has also attracted dollar liquidity through bond sales and external funding, including $925 million from Afreximbank and $2.25 billion from the World Bank. Paragraph 6: US Dollar Index Outlook – The US Dollar Index is trending upward, but data suggests it may face challenges this week. – Resistance levels include 105.9 and 106.51 index points. – Support levels include the 105.52, 105.14, and 104.48-104.61 index points. – A break below these levels could lead to consolidation around 104 points.Naira Maintains Stability in Official Market Following recent market volatility, the Nigerian naira has exhibited stability in the official market, trading within the projections of international credit rating agency Fitch Ratings. The exchange rate between the naira and the US dollar has remained relatively stable at around 420 naira per dollar. This stability is in line with Fitch’s forecast of the naira depreciating by an average of 1% per month, as it gradually adjusts to market forces. The Central Bank of Nigeria (CBN) has attributed the stability in the official market to its interventionist policies and the improvement in foreign exchange inflows. The CBN has been actively selling foreign currency to support the naira, while the recent increase in oil prices has boosted export earnings and foreign reserves. Analysts believe that the naira’s stability in the official market is a positive development for the Nigerian economy. It helps to reduce uncertainty for businesses and investors, who rely on the official exchange rate for their transactions. However, it is important to note that the naira remains under pressure in the parallel market, where it is trading at a premium to the official rate. The CBN has warned against patronizing the parallel market, as it is not a recognized source of foreign exchange. Overall, the stability of the naira in the official market is a welcome development that supports the economic recovery efforts of the Nigerian government. It remains to be seen if this stability can be sustained in the long term, as market forces continue to evolve.