The planned review of the target band of the naira by the Central Bank of Nigeria may warrant further decline of the local currency against the United States dollar next week, financial experts have said.On Monday, the CBN said it would review its target band for the naira in the next few days, adding that depending on where the exchange rate settled it might move the local currency midpoint to N155/156 to the dollar, compared to its current N150.According to experts, the announcement by the apex bank Governor, Mr. Lamido Sanusi, may trigger anxiety among currency dealers which may result into rush for the greenback and would impact negatively on the already dwindling naira.The former Acting Head, Economics Department, University of Lagos, who currently is a Research Professor and Economist, Prof. Kayode Familoni told our correspondent that the devaluation plan might work against the naira in coming weeks.He said, "I dont think CBN needs to devalue the naira now, and to have said that it has plans to review the target band may not favour the position of the local currency against the dollar in the coming week."Devaluation of the naira may have a negative impact on the economy and the masses are bound to suffer it considering other plans like the proposed removal of fuel subsidy."Familoni noted that the development had led to series of uncertainties both in the foreign exchange market and in other sectors of the economy, adding that the regulatory bank should reconsider its plans to devalue the local currency.Meanwhile, currency dealers have said the sentiment favoured further depreciation in view of the new thinking in the CBN."There is a lot of uncertainty in the market considering the new thinking by the CBN on reviewing the present target band upward," a dealer told Reuters.The naira traded at N157.80 to the dollar on the inter-bank market on Thursday, on the same level with Wednesdays close."The market is currently stable as a result of large dollar sales by some energy companies on Wednesday, but could open next week weaker as the market is expecting the CBNs new direction on the naira," another dealer said.The Managing Director and Chief Executive Officer, Universal Anchor Limited, a research, consulting and training firm, Mr. Sesan Awoniki, said the currency might fall next week following the announcement by the apex bank.He said, "There are concerns about the naira and plans to devalue it by the CBN may not favour the currency in the coming week."
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