Mr. Bismarck Rewane, the Managing Director and Chief Executive Officer, Financial Derivatives based in Lagos, has said the Naira to United States Dollar exchange rate may drop to as low as N475 in November and December if the crude oil price remains between $40 and $42 per barrel.
The economic expert disclosed this during a presentation at the Lagos Business School Breakfast Session last week.
The Naira presently exchanges around N463 to N465 against the United States Dollar on the black market.
According to Rewane, the low oil price below $41 per barrel will limit foreign exchange inflow while the resumption of international flights, trading and manufacturing activities would increase forex demand.
Rewane said, “Naira [is] likely to depreciate to trade around 470-475 in November/December. Convergence of multiple rates will continue but unification is unlikely.
“The CBN will maintain its forex rationing stance and intensify efforts to keep the naira stable. External reserves to likely fall towards $34bn in the coming months.”
He explained that the International Monetary Fund’s Article IB review had started, this he said would increase the Central Bank of Nigeria pressure.
“As Nigeria ponders IMF’s conditionalities, CBN could succumb to pressure and devalue the naira to N390-400/$,” he added.