Wednesday 4 February 2009

Nigeria’s Naira May Fall 15% If Crude Weakens, Citigroup Says

Citigroup believes that Nigeria’s naira may weaken as much as 15 percent this year should the price of oil, which accounts for 90 percent of the country’s export earnings, decline to an average $35 a barrel in 2009.

According to David Cowan, an economist at Citigroup Nigeria's currency may slump to about 173 per dollar by year-end. It is currebtly being traded at 150.25 per dollar.


Nigeria’s currency lost almost a quarter of its value following a Nov. 26 decision by the central bank to limit sales of dollars to commercial banks to protect its $52 billion of reserves as oil revenue shrank and foreign investors sold the nation’s assets. Oil has slumped almost 72 percent since its July record of $147.27 a barrel, cutting Nigeria’s export earnings.


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