Naira: Fundamentals Point To Stability

Following a brief period of downward pressure on the exchange rate in May 2010, the naira has again stabilised in the NGN150.00/US$ region, where we expect it to remain over the coming months. This view is based on expectations that the Central Bank of Nigeria (CBN) will meet any excess demand for US dollars, even if this means drawing down reserves. We have accordingly retained our end-2010 target of NGN148.00/US$, although we do not discount the possibility of short-term fluctuations in the interim.

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