Goldman Sachs sees Nigerians naira extending gains that have already made it the best performing currency in the world this month. Meanwhile, Bloomberg Economics says data out today should show inflation slowing in March, helped by a stronger naira. Let’s bring in Bloomberg Andiro Oganga in Kigali for more on this. So Andira, walk us through the turn around of the naira from depreciation to suddenly appreciation. Vani, let’s circle back to where it all began. In May of 2023, President Bola Ahmed Tini came into power and with him a raft of reforms, including liberalization of the FX market and also convergence of both the official and the power rate. These decisions led to a depreciation of the naira by 71% in a period of six months. And in quarter one of 2024, we’ve seen the central bank step in. In their last two monetary Policy Committee meetings, they had their rate by 600 basis points. But they took it a stepfather and also cleared FX backlog of $7 billion. And the market has been responding very positively to this development. We are seeing the narrow in the month of March appreciated by 14% and so far in April it has appreciated by 12% trading at about 1118, the official rate. And that’s where Goldman Sachs is coming from, saying that the Nara is supposed to appreciate about 1000 to the dollar and then suckle back to about 1200 by the end of the year. Wow, so high numbers. Under what can we expect inflation data out today to tell us? If we just go back to the point that I had made Ali about a strong currency, because the naira is gaining momentum by the day, inflation, annual inflation is expected to rise a bit slowly, 32.7% in March from 31.7% in February, and inflation in quarter one is expected to peak at about 35% before it begins a gradual descent and close the year 30%. In terms of the central bank, we’re likely to see two more interest rate hikes closing media at about 28% from the current 24.75 depending on where the currency is and how. Inflation patterns are then the central bank might choose to hold before they begin their gradual descent.
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