Nigeria is a very interesting country in Africa. It has a 225 million population as of 2022. This is more than some major countries in the world.
They banned crypto in 2021 and are going to recognize it once again. But how will its currency look in 2023?
What can we anticipate in this global economic and geopolitical situation? We will discuss all the possible trends below. Since this article refers to predictions in forex trends some readers could take it as financial advice but don’t make that mistake dear traders, this article is only educational and financial advice in nature.
Also, it is very difficult to predict the future and there are always possibilities for major events that can disrupt the entire world economy and order that no one could foresee like the war in Ukraine.
Nigerian Naira outlook 2022
There are main 2022 events and macroeconomic trends we should analyze before going further and saying how NGN (Nigerian Naira) is going to be in 2023.
The Nigerian Naira is in a beautiful downtrend for decades.
There are more red candles on the NGN/USD chart than probably in any other currency pair in the world. This indicates how fragile its economy is.
Even Georgian Lari saw some uptrends against the dollar this year. When the USD gains strength and lowers inflation by raising interest rates, it makes other fragile and developing countries’ currencies suffer greatly.
As these developing countries have to pay debts and cover expenses they usually use the easiest way to get more money. Yes, they print more money and make their currency even more miserable.
In this context, Nigeria is a developing country and the US Fed’s all-out war against inflation is going to affect it negatively too. It is logical to predict that NGN/USD will go down further and a downtrend is highly likely, especially in the first half of 2023. It is important to equip yourself with knowledge and tools which will help you analyze forex or any financial markets extensively and know how to use this information in trading. One way to LearnFX analysis is to look for good online resources which will help you become a successful trader or financial analyst.
NGN 2023 predictions
To conclude from the information and data we’ve got above, there are not going to be many bullish tendencies for NGN in 2023. Most likely the downtrend continuation is highly possible.
The first half of 2023 is going to be rough for two reasons: winter and inflation. Let me explain why. This winter Europe and the entire world are going through an energy crisis and energy prices are rising.
War in Ukraine and sanctions against Russian aggression made Russian energy inaccessible because Russia was always using oil and gas for blackmailing the west. Now the west seems to learn the lesson and tries to say no to Russian energy. It’s not easy to adapt to new challenges and make new energy sources while winter is at the door.
Famine could also be a problem since Ukraine and Russia are the main grain suppliers. Add to this the inflation in the US and Fed’s commitment to raising interest rates until inflation is at comfort levels and we got all the prerequisites for a full-blown recession in 2023.
The Nigerian Naira has been in a downtrend for a long time, so, will it suddenly be able to strengthen its currency more than the US? Highly unlikely that developing countries can implement such a deed. From all the current geopolitical situation in the world, it is more than likely that we see another red year for the Nigerian Naira.
The 2022 Nigerian macroeconomic review also agrees with our analysis of how weak Nigeria’s fiat currency is right now.
For traders, downtrends are not an issue, they can make money no matter the direction of the market. and since it is highly likely that we see a downtrend continuation in 2023, it is a good indicator for traders to just trade bearish signals.
Summary and final thoughts
So, to sum it all up, NGN has been in a downtrend for decades. Current trends in the world: war in Ukraine, famine threats, and rising interest rates in the US all indicate that NGN could be in a stronger downward momentum than it was in 2022.
So, if someone decides to trade any of its pairs it is a good idea to watch only for NGN short-selling opportunities and not take any buy trades. The latest news regarding Nigeria’s recognition of cryptocurrencies could further damage NGN’s buying power as more and more people will try to invest in safe stablecoins.
Besides these facts, It is also extremely rare to see a developing country make a spectacular comeback and current events don’t indicate that Nigeria could be becoming a major economy soon.