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| Nigerian Currency |
A research and financial advisory firm, the WSTC, Financial Services Limited has predicted another adjustment in the naira exchange rate band against the dollar after the 2015 elections.
The firm stated this in its “2014 Economic Review and 2015 Outlook,” made available to e-biz247.
It also anticipated that the demand pressure in the forex market would be sustained by investors’ concern about sliding oil prices, low fiscal buffers and political uncertainties in the interim period after the general elections.
Furthermore, it argued that the firming up of the US economy as well as expectations of higher interest rates in the US presents capital reversal risks.
Nigeria’s external reserves dropped by 27 per cent in 2014, from $43.51 billion at the beginning of the year to $34.47 billion on December 31, 2014, as a result of a combination of global and domestic influences.
On the falling oil prices and its effects on the proposed 2015 budget, it stated: “Plunging oil prices and Nigeria’s excessive reliance on oil revenue as the principal source of federal government earnings has exposed the nation to increasing level of economic imbalance.
It also predicted that the performance of the Nigerian equities market would remain subdued in the first half of 2015 on account of weak oil prices and elevated domestic political risks.
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