Fundamentals Supportive Of Continued Stability

The Nigerian naira experienced a sudden downturn in conjunction with the collapse of the price of oil, the country’s main export, beginning in May 2012; however, in recent weeks the currency has begun to come back, as the price of oil has recovered and supportive policies have been enacted. The naira was testing support at the time of writing on August 06 at around NGN162.00/US$, a level which we expect will hold over the short term, with the currency firming marginally over the coming days. This view is based on an improving fundamental outlook, our belief that currency stability will remain a top priority of the Central Bank of Nigeria, and our expectation that sentiment will improve in line with these developments.

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