The naira is tipped to appreciate this month, next month and within the next 12 months, a business expectations report released on Wednesday by the Central Bank of Nigeria (CBN) has shown.
The naira currently exchanges at N307/$1 at the official market and N362/$1 at the parallel market rate.
According to the report, the level of inflation is also expected to increase slightly in both the next six months and the next 12 months while borrowing rate will rise in the current month, next month and the next 12 months.
‘’Respondent firms expressed optimism on the macro economy in August 2019. Respondents’ outlook on the volume of total order, business activity and financial conditions (working capital) were positive during the review period,’’ the report added.
It said firms identified insufficient power supply, high interest rate, financial problems, unfavourable economic climate, unclear economic laws and unfavourable political climate as major factors constraining business activity in August 2019.
The August 2019 Business Expectations Survey (BES) was conducted from August 12-21, 2019 with a sample size of 1050 businesses nationwide. A response rate of 95.4 per cent was achieved, and the sample covered the services, industrial, wholesale/retail trade, and construction sectors.
The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses.
At 28.6 index points, respondents expressed optimism on the overall confidence index (CI) on the macro economy in the month of August 2019. The business outlook for September 2019 showed greater confidence on the macro economy with 64.7 index points.
The optimism on the macro economy in the current month was driven by the opinion of respondents from services (15.4 points), industrial (10.1 points), wholesale/retail trade (2.4 points) and construction (0.7 points) sectors. For next month, the major drivers of the optimism were services (36.1 points), industrial (20.7 points), wholesale/retail trade (6.0 points) and construction (1.9 points) sectors.