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Whereas the Central Bank of Nigeria (CBN) had continued to struggle in refusing to devalue Nigerian naira, finance experts including some intelligence reports have averred that 2020 may not end before the apex bank will run out of stress in holding naira against devaluation.
Only recently, the SBM Intelligence Report said “The Naira will be devalued,” the report said. The prediction is based on the CBN governor’s triggers for a devaluation– reserve at $25 billion to $30 billion, and oil prices at $50 to $45.
The report further argued that “If the current trend continues, the CBN will have to take a decision regarding devaluing the Naira to relieve some pressure on the reserves.”
Even since 2018, monetary policy pundits have continued to stress the need for major changes with the self deceit of CBN’s Naira defence.
However, the fact is the country has major revenue issues and the artificial measures to prop up the Naira will definitely wear out.
SBM Intelligence said in their report predicting the events of 2020 that “The Federal Government’s revenue position is alarmingly untenable, and with the modest increase in the National Minimum Wage still yet to take effect, the CBN simply cannot continue to defend the Naira at current levels,”.
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