curator
Administrator
The pressure on the naira heightened yesterday after reports that Bank of America suddenly downgraded naira-linked instruments on fears of further value hemorrhage in the market.
The downgrade followed the fall in Nigeria’s external reserves below the psychological resistance level of $41 billion yesterday ebbing to $40.6 billion (seven months imports) because of the frequent requirement to resort to the once healthy reserves to defend the national currency.
The external reserve level is now about 17 percent lower than 2013 peak of $48.86 billion and 6.67 percent below December’s level of $43.6 billion.
The Bank of America says whereas there might be the political will to continue to defend the naira, the running down of the reserves remained a constraining factor and then went on to recommend underweight position, forecasting a further weakening of the national currency to N170 in 2014.
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Source: Business Day Nigeria
The downgrade followed the fall in Nigeria’s external reserves below the psychological resistance level of $41 billion yesterday ebbing to $40.6 billion (seven months imports) because of the frequent requirement to resort to the once healthy reserves to defend the national currency.
The external reserve level is now about 17 percent lower than 2013 peak of $48.86 billion and 6.67 percent below December’s level of $43.6 billion.
The Bank of America says whereas there might be the political will to continue to defend the naira, the running down of the reserves remained a constraining factor and then went on to recommend underweight position, forecasting a further weakening of the national currency to N170 in 2014.
Click here to read more
Source: Business Day Nigeria
