Bank of America Discovers Extra 20% Decline in Naira Worth in 2023. Naira is expected to be subject to pressure that will increase ” due to limited external borrowing by the government,” devaluation is likely to occur after the 2023 elections for the presidency the bank said.
What Bloomberg published: According to a report by Bloomberg, economist Tatonga Rusike stated in a letter to clients on Tuesday, “three indicators include the black-market rate, which is widely used and the central bank’s actual effective exchange rate and our own fair value analysis show that the naira is about 20 percent overvalued.
“We believe there is a chance for it to decrease by a similar amount over the next six to nine months, pushing it up to 520 dollars.”
The reason Naira is under pressure while Naira is expected to be subject to pressure that will increase ” due to limited external borrowing by the government,” devaluation is likely to occur after the 2023 elections for the presidency the bank said.
The world’s biggest economy runs in a multi-exchange system governed by a strictly controlled exchange rate that is official and an unregulated market where the currency is traded in a free market.
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Future: “The greater the dissimilarity to the market that is officially recognized more likely is the possibility of an increase in demand for foreign currency in the parallel marketplace, “the bank said.
Current rateThe Naira was exchanged for 440.95 for the US dollar on the official spot , while the rates for parallel exchange increased to N740 according to the bureau de change’s operator.
Official rates have declined in less than 10 percent since December 2021 , despite the fact that the parallel rate has fallen by almost a third in the same time frame, bringing the gap to nearly 70 percent, analysis show.
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