For the first time in the history of Nigeria, the Naira may cross over N1,000 to the US dollar by the end of September, if the pressure on the Nigerian currency continues the way it has been for the past four days.
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On September 18, $/N closed at N965 while € and £ closed at N1,017 and N1,223 respectively at the parallel market majorly dominated by the Bureau De Change operators.
Four days after, specifically on September 21, 2023, the US dollar exchanged for 985 naira, the Euro exchanged for N1,035 (€/N1,035), while the British pound exchanged for N1,240 (£/1,240) at the start of FX trading on Thursday.
Why Naira May Exchange for N1,045 to a Dollar By September 30
Using a simple extrapolation analysis, here is what InfomediaNG get:
Question: If a dollar exchanged for N965 on September 18, it fell further against the US dollar by exchanging for N985 to a dollar on September 21, here is likely $/N exchange rate by September 30:
Please note that this is a very basic calculation and does not take into account other factors that might influence the exchange rate in Nigeria, even as Africa’s largest economy can refine its crude, which poses a big challenge for the new CBN governor.
Rate of Change=Final Value−Initial Value OVER Number of Days−1
Which means:
- Rate of Change=985−965 OVER 21−18
- Rate of Change=20 OVER 3=6.67 Naira per day
Can we find the difference in days between September 21 and September 30?
The difference in Days=30−21=9 days
If this difference between the Dollar and Naira continues till September 30, let’s find what the $/N exchange rate will most likely be by September ending:
Predicted Value=Current Value + (Rate of Change×Difference in Days)
Predicted Value=985+(6.67×9) =985+60.03= 1045.03 Naira to a dollar
So, using a simple linear extrapolation, the exchange rate on September 30, 2023, would be approximately $/N1,045.03.
Update:
We shall continue to update this rate till it crosses the prediction we have in this article.
Closing Rate September 22:
FX trader in Port Harcourt Rivers State capital , told InfomediaNG that buy/sell now N990/N1005 to a dollar.
In Lagos, it closed at $/N995 at the parallel market, just as the new CBN Governor Yemi Cardoso assumed office today.
Closing Rate September 21:
By the close of trading September 21, $/N buy/sell was 980/993 to a dollar.
September 28, 2023
- USD/NGN = 995/1007
- EUR/NGN= 1045/1065
- GBP/NGN= 1257/1270
Caution:
To predict the future USD/NGN exchange rate in Nigeria, you typically need more information, like trend data or economic indicators and Forex policies by the government.
Forex trading is volatile.