The naira will weaken in the parallel market as oil prices stay at $40-$42 per barrel and likely depreciate to 470-475 against the dollar in November and December, the Managing Director/Chief Executive Officer, Mr Bismarck Rewane, has said.

Rewane stated this in his presentation at the Lagos Business School Breakfast Session last week, a copy of which was obtained by our correspondent on Monday.

The Nigerian currency is currently trading around 462 to 465 against the greenback in the parallel market.

According to Rewane, oil prices are under pressure again, currently trading below $41 per barrel, and this will further limit foreign exchange supply.

He said the resumption of international flights, trading and manufacturing activities would heighten forex demand pressures.

Rewane said, “Naira [is] likely to depreciate to trade around 470-475 in November/December. Convergence of multiple rates will continue but unification is unlikely.

“The CBN will maintain its forex rationing stance and intensify efforts to keep the naira stable. External reserves to likely fall towards $34bn in the coming months.”

The economic expert stated that the International Monetary Fund’s Article IV review had started, adding that the Central Bank of Nigeria would come under additional pressure.

“As Nigeria ponders IMF’s conditionalities, CBN could succumb to pressure and devalue the naira to N390-400/$,” he added.

According to him, the 2021 budget is likely to be revised, as a result of the impact of lower oil prices and higher expenditure and the #EndSARS crisis, which will deepen the economic crisis and delay the recovery.

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He noted that CBN’s Monetary Policy Committee meeting in November would take place against the background of the need to provide further stimulus in the wake of the #EndSARS crisis and surging inflation and currency pressures.

“MPC [is] likely to maintain status quo. If inflation rises further and exchange rate pressure continues, then something will have to give. A hike in interest rates may be necessary to stave off pressure,” Rewane said.

He said a second wave of COVID-19 and global lockdowns would trigger a fall in commodity prices, trade activities, capital flows and remittances.

According to him, a Joe Biden presidency in the United States will mean increased focus on renewable energy; a revival of the Iran nuclear deal; banning of fracking on US federal lands, and the US to rejoin the Paris accord on climate change

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