Naira may devalue by 20% in 2023 – BoA

Nigeria’s local currency unit is set to weaken further next year as its current exchange rate to the dollar is well above fair value, according to Bank of America.

According to a report by Bloomberg, economist Tatonga Rusike said in a note to clients on Tuesday that, “three indicators, the widely-used black-market rate, the central bank’s real effective exchange rate, and our own currency fair value analysis shows the naira is 20 per cent overvalued.

“We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as 520 per USD.”

While the naira will come under increasing pressure “due to limited government external borrowing,” devaluation is unlikely to happen until after the February 2023 presidential elections, the bank said.

The naira exchanged at 440.95 to the dollar in the official spot while parallel rate went up to N740, according to the bureau de change operators.

Ameh Jazzia-Becky

Recent Posts

BBNaija’s Phyna publicly rejects family, drops surname

Big Brother Naija Season 7 winner, Josephine Ijeoma Otabor, also known as Phyna, has publicly…

15 mins ago

Yemi Alade slams Cool FM, Clout Africa over blacklisting, refusal to forgive

Nigerian singer Yemi Alade has criticized prominent media outlets Cool FM and Clout Africa, accusing…

39 mins ago

BREAKING: Relief as Lakurawa terrorists flee Nigeria after military intervention

Senator Adamu Aliero, representing Kebbi Central, has announced that the Nigerian military successfully expelled the…

55 mins ago

BREAKING: Supreme Court nullifies National Lottery Act, grants states exclusive control

The Supreme Court has struck down the National Lottery Act of 2005, ruling that the…

1 hour ago

Latest update on fuel price hike, fuel scarcity for November 22nd, 2024

As Nigerians express their frustrations over the recent fuel price hikes by the Nigerian National…

6 hours ago

Full List of 80,000 delisted companies published by CAC

The Corporate Affairs Commission (CAC) has officially removed companies that failed to file their annual…

6 hours ago