The Central Bank of Nigeria is seen devaluing the naira by as much as 10 percent in 2022, Abhilash Narayan, a senior Investment Strategist at Standard Chartered said.
“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 percent depreciation from N414 to around N450-460 in 2022, Narayan said during a webinar themed ‘Global Market Outlook-Africa’ by Standard Chartered on Wednesday.
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The apex bank has devalued the currency three times since March 2020 as lower oil income put pressure on the nation’s reserves.Last year, the currency was devalued 8.6 percent to N414/$.
The International Monetary Fund in a recent report advised emerging economies including Nigeria to allow their currencies to depreciate in response to tighter funding conditions and an imminent policy tightening by the Federal Reserve Bank of the United States.
Steve Brice, the Chief Investment Officer at Standard Chartered during the webinar said interest rates will get higher in the US but not as high as is being speculated.
“We also see interest rates going higher in countries like Ghana, Kenya and Zambia but Nigeria will be able to hold the line and support recovery despite weak naira,” Brice said.
