PwC Scared For The Naira
All appears to be well with the dollar now, after CBN spent an estimated $15.9million to improve its fortunes.
But professional services firm, PricewaterHouseCoopers, PwC believes the Naira’s troubles are not over.
Within the second half of this year, PwC believes, the naira will suffer again and may depreciate against the United States dollar to 386 naira from the current average of 360-naira per dollar.
In its economic outlook for 2018, which was released on Tuesday, the professional services firm said increased foreign exchange demand ahead of the 2019 general election might make the local unit to weaken.
“With the outlook on the oil price and level of reserves accretion ($40.6bn), we expect that the CBN would maintain the exchange rate peg of 305/dollar at the CBN window.
“In H2’18, we estimate a 7% exchange rate depreciation in the Investors and Exporters, I&E window to 386/dollar, as FX demand increases, and foreign investments slow ahead of the 2019 elections,” the firm said in the outlook report.
“Overall, the CBN maintains its multiple exchange rate regime, sustaining its intervention in the various FX markets,” it added.
According to analysts at PwC, exports are likely to outpace imports on strong oil export revenues and shrinking import demand this year
They say real Gross Domestic Product growth is expected to reach 2% year-on-year on improvements in net exports and domestic demand.
Also Watch: You Should Watch This Before Investing In Stock This Year