The Managing Director, Citi Bank, David Cowan has predicted a further devaluation of the naira, stating that the value of the country’s external reserves is too low to sustain the defence of the currency.
Cowan specifically said the Central Bank of Nigeria would once more devalue the naira towards the end of the year.
He stated this on Tuesday, June 23, at the EuroFinance conference in Lagos.
Cowen said: “What the central bank is battling is to the extent and how much the naira has to adjust. At the moment, the central bank thinks that the naira has adjusted enough, while market doesn’t think the naira has adjusted enough.”
He added: “I still think we are going to see an adjustment to the naira. The fiscal and current account deficit tells us that a lack of real return and I think it is also in the bottom-line they haven’t got the reserves in defending the naira. But there is still a long period in this stand-off which would last maybe three four months or longer.
“Whatever happens, I still think that the exchange rate would end up around N220/$1 late 2015, he added.
He is of the opinion that the apex bank does not want the forex reserves to decline further than its present value. External reserves stood a $29.031 billion as at Monday, June 22.