The Naira remains stable in the black market as traders shift focus to the release of U.S. nonfarm payroll data expected later today. The local currency trades at approximately N1660/$, showing minimal fluctuations despite recent market pressures.
Market trends indicate that Naira bulls have yet to push rates below the N1600/$ threshold. However, analysts foresee potential gains in the mid-term, supported by projections of reduced inflation in Nigeria.
A recent report projects the country’s inflation rate to decline to 27.1% by December 2025. This offers a glimmer of hope for businesses and consumers navigating economic challenges, signaling that structural reforms are beginning to yield positive outcomes.
Inflation Concerns Persist
Despite this outlook, rising fuel prices and currency depreciation continue to exert pressure on Nigeria’s economy. Inflationary trends became particularly pronounced in 2024 following the removal of fuel subsidies and foreign exchange market reforms. These factors remain critical to shaping business performance expectations for early 2025.
U.S. Dollar Maintains Strength
The U.S. dollar holds firm, buoyed by the Federal Reserve’s signals of continued monetary tightening. The dollar index trades near 109, marking its strongest position since late 2022.
Investors are closely monitoring the December jobs report, which is expected to show a decline in job creation from 227,000 to 160,000. The Federal Reserve’s December meeting minutes further highlight a cautious approach to interest rate adjustments amid inflation concerns.
Technical indicators suggest the dollar index will maintain its elevated position, with key support around 108.5 points as market volatility continues.
