Why did Nigeria's Central Bank devalue the naira?

This article is for subscribers only. Sign up to our Next Africa newsletter and follow Bloomberg Africa on Twitter Nigeria’s central bank devalued the naira by 7.6% against the dollar as authorities in Africa’s biggest oil producer migrate toward a single exchange-rate system for the local currency.

Will Naira devaluation happen in 2023?

“We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as 520 per USD,” Rusike said. While the naira will come under increasing pressure “due to limited government external borrowing,” devaluation is unlikely to happen until after the February 2023 presidential elections, the bank said.

Why did the naira go down 750 to the dollar?

Traders said the central bank had removed trading restrictions on the official market, which drove the naira to a record low of 750 to the dollar on the official market, down from Tuesday's low of 477 naira to the dollar, Refinitiv Eikon data showed.

Will a devaluation push up inflation?

A devaluation would likely push up annual inflation that’s at a 17-year high of 21.1% -- although it’s already been impacted by the weaker black-market rate -- and cause a one-off increase in the ratio of public debt to gross domestic product, said Mark Bohlund, senior credit research analyst at REDD Intelligence.