Having based their medium term expenditure on N160 to a Dollar by the government of Federal republic of Nigeria, it is expected that Naira is most likely to lose it strength and value further. A report from a government official indicated that the medium term expenditure of the government in 2013, 2014 and 2015 was based on exchange rate of N160. Currently, naira is being exchanged at N156 at inter bank market but in the open market, it is trading at N160 per dollar.
If the 2013 is based on exchange rate of N160 per dollar, what it simply means is that Nigerian government will let naira depreciate further come next year. Invariably, local dwellers will tend to purchase and hoard dollar very soon.
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