Checkout Magazine has learned that the Central Bank of Nigeria (CBN) is unlikely to devalue the naira, despite rising demand for the dollar at both official and parallel markets.
A report by Augusto & Co. titled: “2022: The Story So Far & What Lies Ahead”, said the naira, which started this year at N567/$ at the parallel market, now exchanges at N707/$. It is N416.37/$ at the official market.”
The report added that the declining value of the local currency “has pushed up the exchange rate premium between the official and parallel markets to N290.63/$.”
The last devaluation of the naira was in May 2021, when the CBN adopted the Nigerian Autonomous Foreign Exchange Rate (NAFEX), also known as the Investor and Exporter (I&E) forex window rate, as its official exchange rate for the dollar.
The report read in part: “We do not expect the CBN to officially devalue the exchange rate despite sustained pressure. At the official market, we expect the naira to hover between N419/$ and N425/$ through the end of 2022.
“The persistent swings and volatility of the naira exchange rate have worsened in recent time. It began a wild race on July 19, depreciating by 16 percent to N717/$ on July 28 before appreciating to N707 on July 29.”
The report explained that election-related uncertainty will severely limit capital inflows in the remaining months of 2022, even if domestic interest rates rise further.
