Nigeria will not devalue its local currency, Naira, in 2020 - Report

A towel with a print of the Nigerian naira is displayed for sale at a street market in the central business district in Nigeria's commercial capital Lagos February 4, 2016.
  • Coronation Merchant Bank sees CBN keep Nigerian naira stable throughout year 2020.
  • Guy Czartoryski, Head, Research, Coronation Asset Management, expresses optimism that the CBN's mapped out policies will ensure the stability of Naira at the forex exchange market.
  • Analysts believe that the level of foreign portfolio investment (FPI) in the open market operation (OMO) bills will help ease the pressure on FX reserves.

The Nigerian government would not devalue its naira this year as being speculated, analysts at Coronation Merchant Bank said in a new report.

According to the report, titled; “Year Ahead 2020: Re-risking the financial system,” Coronation Merchant Bank argued that the CBN would keep the exchange rate at close to N362.50/$1 for most, if not all, of 2020.

Corroborating the report at a Breakfast session in Lagos on Wednesday, February 19th, 2020, Guy Czartoryski, Head, Research, Coronation Asset Management, expressed optimism that the CBN's mapped out policies will ensure the stability of Naira at the forex exchange market.

Although foreign exchange reserves fell steeply during the second half of 2019, we believe there will be sufficient sources of US dollars in 2020 for the CBN to support FX reserves.

“These include possible issues of Eurobonds and international loans,” the report added.

Analysts at Coronation Merchant Bank believe that the level of foreign portfolio investment (FPI) in the open market operation (OMO) bills will help ease the pressure on FX reserves.

The currency closed N360, N364.38, 307 to the dollar at the parallel, I&E – Investors’ & Exporters’ FX Window, and the official market on Thursday.

Last year, the Central Bank of Nigeria (CBN) also ruled out the possibility of devaluing the naira, expressing optimism that crude oil prices will remain stable.

The benchmark Brent crude futures were up 83 cents, or 1.4%, to trade at $59.94 per barrel on Thursday.

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