By Our Reporter |
Goldman Sachs Group, a global investment banking firm, has predicted that a significant devaluation of the naira is expected within the next one and the half year.
The investment firm believes this will help bring about “the desired balance” required to stabilize the currency, according to a story published by Bloomberg.
According to Bloomberg, “Goldman Sachs Group Inc. this week said a significant devaluation of the naira is likely in 12 to 18 months to stabilize Nigeria’s external accounts. An exchange rate of 500-550 per dollar should bring about the desired balance…. compared with a current rate of about 407”
CBN Devalues Naira Twice in 2020
The impact of COVID-19 is telling on the Nigerian currency. This year alone, the CBN has adjusted the official exchange rate twice this year. The first one was from N307/$1 to N360/$1 and then just last week, from N360/$1 to N380/$1.
At the NAFEX market were the exchange rate is determined by market forces, the exchange rate trades between N388-N390 though turnover remains thin. The SMIS window currently exchanges forex at N380.69/$1 and BDC segment N447/$1. The parallel market exchange rate has averaged N475/$1 more recently.
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