Macroeconomic Forecast Nigeria

October 2007 | Macroeconomic Forecasts

Amid rapid appreciation of the naira we revised our year-end exchange rate forecast to NGN122/US$ in late October. The naira's rapid appreciation was due to a large influx of oil profit repatriation that the bank declined to offset by buying dollars. We believe the bank's decision to allow appreciation was in response to the high rate of non-food inflation, which had hit 10.5% y-o-y in September. We do not expect the bank to intervene aggressively while inflation remains a problem and therefore project further appreciation to NGN119/US$ over the following year.

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