The Central Bank of Nigeria will have to devalue the naira at some stage, possibly by more than 15 per cent, global ratings agency, Standard & Poor’s, has said.

The agency, however, said on Wednesday that it saw the adjustments as likely to be gradual.

Local and foreign investors have seen a devaluation of the naira as long overdue for Nigeria, which has been battered by the recent tumble in crude oil prices.

Following the naira devaluations in November and February, the CBN has recently focused on curbing access to foreign exchange at the interbank market for importers of some goods, introducing stringent restrictions three weeks ago.

But the Director, Sovereign Ratings, Standard & Poor’s, Ravi Bhatia, said the recent measures by the CBN including stopping the sale of forex to importers of 41 items at the official forex markets could only delay the inevitable, Reuters reported.
ADVERTISEMENT

“Another devaluation is inevitable… they will have no option but to devalue,” said Bhatia at a media briefing.

Many investors are positioning for a devaluation of around 15 per cent. Bhatia said that sounded “reasonable”, though even more might be needed.

Non-deliverable forwards – derivatives used to hedge against future exchange rate moves – reflect expectations of currency weakening: six-month NDFs price the naira at 233 per dollar, some 18 per cent weaker than the CBN’s pegged rate of 196.95 on Tuesday.

On Wednesday, the naira hit another record low of 242.5 against the dollar on the parallel market operated by dealers in bureau de change, down 0.42 per cent from Tuesday.

The naira has been hitting record lows at the parallel market since the latest central bank measures introduced three weeks ago.

Bhatia did not expect the adjustment to be done in one go.

“I think at this stage the plan is to move in increments, not to do a ‘one big step’ devaluation like they would in the old days,” he said.

The central bank has said it is in no mood to devalue the naira, given the risks to inflation from a weaker currency, and that it will not be focusing on the thinly traded parallel market when determining the exchange rate.

Local and foreign investors have also been nervous that Nigeria may lose its place in the benchmark GBI-EM local currency debt index. Bhatia said this was a “real possibility”, although he expected the government to adjust policy enough to maintain its membership.

“At some point they have to decide: do they want to go with their policies or do they want to stay in, and at the moment they are trying to do both, and it has worked,” said Bhatia.

“But there are issues there, and it is a concern.”

JPMorgan warned in June it could eject Nigeria from its benchmark index by year-end unless it restored liquidity to currency markets in a way that allowed foreign investors to transact with minimal hurdles.

In March, Standard & Poor’s cut its rating on Nigeria to B+, changing its outlook to “stable”.

SOURCE: http://www.punchng.com/business/money/cbn-has-no-option-but-to-devalue-naira-sp/

With buhari as president Nigeria will soon go back to trade and barter, stone age things

Q1... Can this be the changes we have been expecting?

Q2... Does it mean that the APC were juz clamouring change as a their slogan witout proper plans to effect it?

Q3... Can Nigeria maintain her integrity as Africa's no.1 economy under this regime?

God help Nigeria as I dont kno who to call clueless president now between Buhari and Goodluck.

Devalue it o. if it will make our economy better

The rate at which naira is going down it will soon discover oil...SMH

In the next two years dollar would get to 350 NGN

Truth!

Look...Nigerians....we have no option.

All these years when we should have gotten off oil...we spent on over-importation of things we could manufacture.

The era of oil imports is over. Nigerians....please kindly tell your governors and PMB to develop our industries.

And by the way....if transformation worked....we would not have been here!

buhari is a failure

wish i can retrieve my votes and dat of my siblings casted for this recycled dude

sweet jesus

we poor man na him go sufa ham...

M

Y'all Vote a Nairalander "Blaqbonez"
He Made The Vector's KING_KONG Competition Top10 List...

http://notjustok.com/2015/07/15/king-kong-rap-contest-top-10-finalists-released-voting-starts-now/

Its Easy To Vote! Won't Take Your Time...

babajero:
With buhari as president Nigeria will soon go back to trade and barter, stone age things

wen i talk say sugar still dey some nigerians 4 brain una go say na lie

my brother God bless u


go open ministry

u see and envisage beyond T.B Joshua

The ZOO must fall!!!!!!!!

Hmm.... CBN naija currency deserves bera

When will #1 equal $1?

Another Naira story. Well Naira sorry

As they have said, a devaluation is inevitable! That is the truth.

The disparity will simply encourage round tripping which simply blesses the connected.

The problem with central banking is that the position needs someone knowledgeable in both banking and economics. The present governor seems only good in banking hence the nonsense we are seeing.

Any disparity above 3% in the rate between the official and parallel rate is not acceptable as it leads to round tipping and all kinds of shady deals.

Never. All this is called market manipulation to rush gullible Nigerian to demand and buy expensive dollars hoping to devalued naira and make money but the opposite happens and the will loose big money.

Any one still waiting for N1-$1?


[size=18pt]NTORRRRRR!!![/size]

This is what I call..... #1 to $1......APC how market
Buhari scamming South West and northerners since 1914

Read Carefully and Understand why all this is happening

Exchange rate doesn't just get devalued because of what happened today, it is as a result of what happened yesterday. Buhari's government hasn't done anything that warrants devaluation of our currency. Observe that the report said the devaluation has been long overdue, they were probably waiting for GEJ to win the election before they told us the truth about how bad things had become, hope you didn't forget when GEJ told workers on May Day to prepare for hard times.

During the Global Economic crisis of 2008-2009, Yar'Adua had saved up to $62 billion dollars from the $43 billion OBJ left in the Foreign reserve before leaving office, the CBN used some of this to cushion the effects of the economic crunch...

Fast forward to the time of GEJ, Nigeria started witnessing oil boom again, GEJ couldn't save anything in the foreign reserve, he rather depleted it to an all time low of $29 billion dollars, he could not even invest the money he didn't save into the economy, not even after causing hardship on Nigerians after increasing the price of petrol, remember it was this same period that he started wasting 2 trillion naira on subsidy thieves, apart from that his government started granting fraudulent import waivers that caused Nigeria a loss of over $20 billion dollars, not to mention that his government through the NNPC mismanaged at least N3.8 trillion of Nigeria's revenue, it was all Jamboree. The most annoying part was that out of all these trillions, he could only afford to spend only N15 billion naira on Youwin project to create few jobs for the very youths who stood by him all through his jamboree government, but he was paying over 2 trillion to cabals who even abandoned him after he lost election.

Even with the oil price crumble, almost empty Federation account and only $29 billion in foreign reserve, Buhari was able to save $700 million in just 1 month to shore up our foreign reserve as a matter of urgency so that we won't be faced with hardship with the rising dollar, oil price fall and inflation.

Let's call a spade a spade, we are the ones who will suffer the financial crisis created by GEJ, we must support Buhari to recover all our money from GEJ and his cronies, they didn't steal money for us, thy stole for themselves and their families while we fight on their behalf, we must ask them to return our money. Leave only those who are being paid to support them them to do thier jobs, do not join them, let's all work together and put them to shame!

Source for the missing money I wrote about regarding the fraudulent import waivers and NNPC mismanagement can be seen from my previous article: https://www.nairaland.com/2453849/call-action-agents-doom-set

ChinoJeff:
Q1... Can this be the changes we have been expecting?

Q2... Does it mean that the APC were juz clamouring change as a their slogan witout proper plans to effect it?

Q3... Can Nigeria maintain her integrity as Africa's no.1 economy under this regime?

God help Nigeria as I dont kno who to call clueless president now between Buhari and Goodluck.

Your hero GEJ is partly responsible.

Power was still badly developed, and Ajaokuta is nowhere near functioning.

Infact...was APC in charge for 16 years...when PDP Ministers like Nebo were telling us we would have sorted out our power problems by this time last year....only to tell us that they lied when the time came.?

Stop blaming APC for PDP's mess.You can tell APC that oil dependency is no longer welcome.

Better!

datguru:
In the next two years dollar would get to 350 NGN

At this rate the a dollar might be going for 500 NGN before the end of the year...


The naira is becoming worthless day by day and someone claims 'he knows what he is doing'...SMH

Buhari is working. Sai buhari

This is really affecting online importers. Imagine buying goods worth 10000$

na wa o.....Devaluation of currency!!!!!...jeez