The Nigerian naira has strengthened against the US dollar in the parallel market, trading between N1585 and N1590 per dollar, as the greenback loses value globally.
This improvement in the naira’s value can be attributed to Nigeria’s declining inflation rate, which dropped to 22.97% in May, and the rally in oil prices, given the country’s reliance on crude oil for foreign exchange income.
According to Bismarck Rewane of Financial Derivatives Company, the naira is expected to fluctuate between N1,600 and N1,650 per dollar in the official foreign exchange market during June and July.
This forecast is based on the Central Bank of Nigeria’s efforts to control excessive money supply.
Meanwhile, the US dollar has been under pressure due to escalating tensions in the Middle East, particularly the Israel-Iran conflict, which has led to increased uncertainty in the global foreign exchange market.
The conflict has also caused concerns about potential supply disruptions in the Strait of Hormuz, a critical waterway for oil shipments.
As the Federal Reserve prepares to make a decision on interest rates, investors are closely watching the situation, anticipating that the central bank will maintain current borrowing costs. Today’s economic indicators, including a weekly report on unemployment claims, will also be closely monitored.
