In a new slew of financial projections that involve the Naira, the predictions coming in for the trajectory of the Nigerian currency for 2021 do not exactly inspire optimism.
What are the projections for the Naira?
The managing director of Financial Derivatives Company (FDC), Bismarck Rewane, has projected that the Naira will depreciate to N420 against the dollar on the official window by the end of 2021.
Rewane spoke at a virtual event tagged “Vantage Forum 2021” on Saturday.
The economist also projected that the Nigerian currency would exchange at N470 to the dollar at the parallel market.
At present, the Naira trades at N480/$ at the parallel market and N380 at the Central Bank of Nigeria’s official rate.
According to him, this projection is based on a worst-case scenario where Nigeria produces 1.5 million barrels per day (BPD) with an inflation rate of 16.15 per cent in the full year.
Also Read: Lower Oil Demand May Continue Beyond 2021
If Nigeria can produce 1.8 million barrels of crude oil per day at $60 per barrel, Rewane said the Naira would trade around N464/$ with an inflation rate at 15.78 per cent at the end of the year.
Nigeria’s daily crude oil production will be pegged at 1.51 million BPD between January and March due to voluntary production cuts by the Organisation of Petroleum Exporting Countries (OPEC) to mop up the supply glut the market and shore up oil prices.