The Central Bank of Nigeria (CBN) has revealed in its Business Expectation Survey (BES) report for July that business enterprises are optimistic the Naira will depreciate in the third quarter of the year as there would be improvement in the economy in the next six months with an optimism index of 7.6 points.

According to the CBN the report was based on 1,600 business enterprises nationwide operating in the Industry, Services and Agriculture sectors, with 98.9 per cent of the firms responding.

The report said: Respondents indicated optimism on overall business outlook in July 2024, as the business conditions in Nigeria are expected to improve. This optimism is driven by the opinion of respondents from the Agriculture Sector.

Respondents outlook for the next month, next three months and next six months all indicated optimism.

The positive outlook in the volume of business activities of the firms in the next month implied improved prospects for employment in the same period. The sector with the highest prospect for employment is the Agriculture Sector, followed by the Industry and Services sectors.

The respondent firms opined that insecurity was the major factor constraining the business activity in July 2024. Other constraining factors are high interest rate, insufficient power supply, and high/multiple taxes.

Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under review. Respondents also opined that the current inflation rate of 34.19 is too high. (Daily Independent)