Naira on Wednesday slide against the US dollar across segment of foreign exchange market as a result of strong dollar demand by end users and importers.

After trading on Wednesday, the local currency weakened by N2 or 0.84 percent at the Bureau De Change segment of the foreign exchange, closing at N240/$ compared with N238/$ the previous day, BusinessDay survey has revealed.

At the parallel market, naira lost N1 or 0.42 percent in value against the dollar as it closed at N241/$ as against N240 the previous day, while at the inter-bank the nation’s currency depreciated slightly by N0.09k/$ or 0.20 percent to N198.43k/$ from N198.04/$ the previous day, according to data obtained from Financial Markets Dealers Quotations (FMDQ).

Meanwhile, ratings agency Standard & Poor’s said on Wednesday that Nigeria will have to devalue its currency at some stage, possibly by more than 15 percent.

David Cowan, Africa Economist managing director, Citi Research, London, forecast 10 percent adjustment in naira from its current fix in 2020.

Investors have seen a devaluation of the naira as long overdue for Africa’s largest economy and biggest oil exporter, which has been battered by the recent tumble in crude prices.

Following devaluations in November and February, authorities have focused recently on curbing access to hard currency on the official interbank market for importers of some goods, introducing stringent restrictions three weeks ago, Reuters reports.

But those measures just delay the inevitable, said Ravi Bhatia, director of sovereign ratings at Standard & Poor’s.

“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 percent. Bhatia said that sounded “reasonable,” though even more might be needed.

http://businessdayonline.com/2015/07/naira-falls-as-sp-predicts-devaluation-by-15

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