Market News

Citing Nigeria’s economic fundamentals and the outlook for commodity prices, foreign exchange company, Ebury Partners UK Limited, has said it expects the naira to extend its losses next year.

According to Bloomberg, the firm which made the prediction in a new report, said that the naira is likely to face more pain before things will start to improve for the local currency.

Four of the seven African currencies monitored by Ebury are seen holding their ground or gaining in 2025, with the other three extending losses, the London-based firm said in the report.

“The wide-ranging idiosyncrasies inherent in Africa ensure that we hold a rather diverse view on the currencies,” said Matthew Ryan, head of market strategy at Ebury, in the report.

“The strength of macroeconomic fundamentals are disproportionately important for the region’s currencies. Commodity prices are also an important determinant.” Ebury has penciled in losses for the Angolan kwanza, Ghanaian cedi and the naira in 2025.

The rand is seen extending this year’s rally, while the Kenyan shilling, Ugandan shilling and Zambian kwacha “are well placed to hold their own,” Ryan said.

In a report last week, analysts at Financial Derivatives Company (FDC ) said the naira is likely to continue to slide against the dollar in the coming weeks as a result of rising demand for foreign exchange and the Central Bank of Nigeria’s (CBN) inadequate interventions in the foreign exchange market.

As the analysts put it: “Forex demand pressures resulting from the demand for imports, coupled with the uncoordinated and programmed interventions by the CBN will continue to inhibit stability of the exchange rate. “As a result, the naira is expected to remain weak in the coming weeks. This will be worsened by lower forex earnings, as oil prices are expected to sustain trade below $80 per barrel.

The decline in oil prices is largely due to weak Chinese demand and the expectations of a supply boost by OPEC+ before the end of October.”