There may be further naira devaluation 'Analysts

Owing to the persistent instability witnessed at the foreign exchange market, analysts have said that another imminent devaluation of the local currency may happen soon.The analysts said with what was being encountered at the forex market, the regulator might have no choice than to further devalue the currency unless it continued to intervene in the market to restrain pressure.The CBN recently announced the devaluation of the naira, setting the new official exchange rate at N155.00 to the United States dollar from its previous rate of N150 and maintaining the band of plus or minus three per cent.The new exchange rate represents 3.2 per cent devaluation in the face of heightened demand for forex and the depletion of the countrys foreign reserves in an attempt to defend the value of the naira.The Managing Director, Sotice Investments Limited, Mr. Adedayo Toluwase, said, "There may be another depreciation of the naira with the way the market is going, except the CBN is ready to continue with its intervention."Speaking in the same vein, the Chief Executive Officer, Telex Financial Services Limited, Mr. Michael Anyanwu, said the problem in the forex market was majorly as a result of the high import dependent nature of the countrys economy."Nigeria imports virtually everything; hence, dollar demand is bound to be high. Its a structural problem. Unless we start exporting and do less of importation, the CBN will need to support the naira heavily or devalue the naira," he added.Meanwhile, the naira weakened against the dollar at the inter-bank market on Wednesday, but strengthened at the bi-weekly auction after the CBN cleared all demand for the greenback at its official window.The local currency closed at N161.20 to the dollar at the inter-bank market compared to N161.10 to the dollar on Tuesday.Also, the CBN planned to auction treasury bills worth N125.09bn ($776.72m) at its regular debt auction next week.The regulator said it would sell N30.09bn in 91-day paper, N45bn in 182-day treasury bills and N50bn in 364-day bills next Wednesday, using the Dutch auction system.A statement by the CBN on Wednesday said, "Each bid must be in multiples of N1, 000 subject to a minimum of 10, 000."
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