Naira May Be Devalued After 2023 Elections

Nigeria is expected to devalue its currency after the 2023 gen­eral elections in February by the steepest margin in six years to align it with market percep­tions, according to a survey of investors and analysts, reports Bloomberg.

Nigeria operates a multiple exchange regime dominated by a tightly controlled official rate, cutting off access to many busi­nesses and individuals, which in turn drives demand to the unauthorised black market.

This has led the spread be­tween the managed and par­allel markets to significantly widen. The difference is almost 77%.

Of the 13 participants in the Bloomberg poll, 11 expect the Central Bank of Nigeria to devalue the naira after the election. The remaining two predict it will continue with a gradual depreciation of the currency that started with the adoption of the more flexible NAFEX, also known as the investor’s and exporters’ ex­change rate, last year.