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Naira Likely to be Devalued by 20% in 2023, Bank of America Says

Oct 19, 2022   •   by Ruth Olurounbi   •   Source: Bloomberg   •   eye-icon 804 views
  • Economist sees Nigerian currency exchanging at 520 per dollar
  • Devaluation unlikely to happen until after 2023 elections

 

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. 

 

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% overvalued, economist Tatonga Rusike said in a note to clients on Tuesday. 

 

“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,” Rusike said.

 

Credit:

The post Naira Likely to be Devalued by 20% in 2023, Bank of America Says first appeared in Bloomberg.com on October 18, 2022

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