The USD to NGN exchange rate is currently range-bound.
Key drivers include:
- The interest rate differential shows that the Federal Reserve's expected rate cuts could weaken the USD, while Nigeria's economic growth could support the Naira.
- Improving global growth and stable oil prices may enhance market conditions for the NGN, given Nigeria's reliance on oil exports.
- The International Monetary Fund projects Nigeria's inflation to rise significantly, impacting local purchasing power and currency strength.
In the short term, the USD may trade within a narrow range, reflecting recent stability despite some fluctuations.
An upside risk could come from unexpected strengthening in oil prices, which may boost the Naira. A downside risk includes potential global economic downturns that could adversely affect Nigeria's growth and further weaken the Naira against the USD.
