According to a Russian investment banking firm, Renaissance Capital, the fair value of the naira is 305 against the dollar.
The Bank which released its research findings has advised the Central Bank of Nigeria (CBN) to devalue the Naira to trade at 240, 250 to the dollar.
“The unofficial market rate is now 266/$. Our Real Effective Exchange Rate (REER) model – which we have our doubts about (we never accept one model as providing a universal “truth”) – suggests NGN305/$ is fair-value for the currency,” the bank said.
“Oil prices are below the long-term average so maybe the naira should be weaker than fair value too. The South African Rand is 30 per cent cheaper than its long-term value and that makes some sense when commodity prices have been flushed down the toilet.”
It advised Nigeria to take a big leap in devaluing the naira, in order to avoid a second devaluation in three to six months’ time. The Bank says that this is imperative as it prevents serious investors from taking a look at the Economy. “I would definitely take a fresh look at Nigeria if the currency is moved to 240-250/$ with perhaps 5-10% bands on either side, but I would favour wider bands, giving Nigeria more flexibility to cope with an oil price that has been highly volatile.
“It would be a shame if Nigeria moved the currency rate now – and then came under more pressure in 3-6 months to do it again.
“It would be a shame if new currency bands had as their weakest point, alevel which is only just touching the current unofficial rate of NGN266/$. Far better if there is some flexibility in the system.” the report said.
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Posted: at 12-01-2016 10:21 PM (9 years ago) | Addicted Hero
moralemike07 at 12-01-2016 10:33 PM (9 years ago) (m)
I don't see any good advice from outside Nigeria. Nigerians alone know the solutions to their numerous problem, but acting upon it is just another major problem. We just have a lot problems!
Posted: at 12-01-2016 10:33 PM (9 years ago) | Gistmaniac
Russian advise Nigeria on currency, how about the're own money Rube, from 36rub to 1dollar in 2015, to 76rub -1dollar today. Check it from (ex-change ) falling of oil prices was cost by Russia president vladimir Putin. After invade Ukraine, and all the sanctions from westerns to Russia, thats exactly what cost oil price to fall. They should keep their advice and ratified there own economy first.
Posted: at 12-01-2016 11:40 PM (9 years ago) | Gistmaniac
zezprincess at 13-01-2016 11:05 AM (9 years ago) (f)
Bikokwanu! So na foreign country dey advise una concerning una currency?good for you people,tot naija don free themself from their collonian masters(hahaha)una no learn anything just dey shout make una masters free&settle una,Oya this is the time to show una talent,don't no why this current era of government no get agenda,going to a year now,na only recovering of looter's money wey dey hear,ooooooo.
Posted: at 13-01-2016 11:05 AM (9 years ago) | Hero
Buhari is the worst things that ever happen to Nigeria, the innocent people he has killed b4 will always bring evil to the nation. The bible said when the righteous is on the throne people rejoice in other hand people cry. Ever since Buhari has become Nigeria president things has fall apart in all ramifications.
Posted: at 13-01-2016 08:43 PM (9 years ago) | Upcoming
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