A senior Investment Strategist at Standard Chartered, Abhilash Narayan, has said the Central Bank of Nigeria (CBN) may be seen to devalue the naira by as much as 10 per cent in 2022.
Narayan stated this during a webinar themed ‘Global Market Outlook-Africa’ by Standard Chartered on Wednesday.
“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.”
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 per cent 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.
The Chief Investment Officer at Standard Chartered, Steve Brice, during the webinar said interest rates will get higher in the US but not as high as is being speculated.