Long-Term Risks To The Naira
The Nigerian naira has recovered from its 2013 lows of around NGN164.00 in September to trade at NGN158.53/US$ on the interbank market at the time of writing on December 4. Although this recovery has come at the cost of declining foreign exchange reserves, we believe that these remain large enough - at US$44.5bn on December 2 - for the authorities to defend the currency against significant weakness in short term. Indeed, officials have demonstrated, through both actions and words, that they value naira stability and we therefore expect the exchange rate to remain at around its current level for the next few months.
|Recovery From September 2013 Lows|
|Nigeria - Exchange Rate, NGN/US$|