There are indications that the parallel rate of the Naira may fall to N900 per dollar later this year unless drastic measures are taken to halt that.
A popular independent tax and business advisory firm, Andersen disclosed this in its report titled ‘Nigeria’s 2023 economic outlook”.
According to the report , the value of the naira in 2022 was relatively more stable in the official market than in the parallel market thereby widening the premium between the two exchange rate windows.
This the firm attributed to the heightened demand pressure spurred by FX illiquidity.
It said FX excess demand pressure is expected to continue in 2023 and that would be fuelled by varying factors including elevated global interest rates attracting portfolio investments away from Nigeria , a structurally import-dependent economy and currency speculations if the gap between official and parallel market rates are not closed.
It noted that these factors would make the naira to remain pressured in the foreign exchange windows.
Anderson argued that should the Central Bank of Nigeria continue to maintain the gap, the official rate is likely to be devalued to about N500 per dollar, while the parallel market rate depreciates to about N900 per dollar by the end of 2023.
On the 2023 budget, it said the total revenue was estimated to be N10.49tn and total expenditure was approximately N21.83tn, thereby indicating a budget deficit of N11.34tn, which is a 39 per cent increase from the last budget’s deficit of N8.17tn.