By Ismail Auwal
The Central Bank of Nigeria (CBN) may devalue the Nigerian naira by up to 10% in 2022.
This was revealed by Abhilash Narayan, a Senior Investment Strategist at Standard Chartered, in a webinar titled “Global Market Outlook-Africa,” Daily Trust reports.
He said that “clearly the FX market is constrained but we are seeing some positive development lately with higher oil prices. Nigeria may consider resetting the currency and can see 10 per cent depreciation from N414 to around N450-460 in 2022.”
Since March 2020, the central bank has depreciated the currency three times as lower oil income has put pressure on the country’s reserves. The currency was devalued by 8.6 percent last year, to N414/$.
In a recent report, the International Monetary Fund advised emerging economies, including Nigeria, to allow their currencies to depreciate in response to tighter funding conditions and the Federal Reserve Bank of the United States’ impending policy tightening.
