Experts have recently said that the devaluation of the Naira maybe the way to go following drop in the All Share Index.
All Share Index in Lagos dropped for an eighth day by 0.4 percent to 22,456.32 by the close of work on Tuesday. This despite the advancement of other major developing nations’ stock prices, the MSCI Emerging Markets Index rose 1.6 percent, the most since Nov. 19.
The decline comes as a result of investors not being willing to put money into Nigeria which is at the verge of devaluing its currency.
The Nigerian central bank has in the past kept a stronghold on the Naira’s value through currency-trading curbs and restrictions on imports since March last year. This has in turn caused shortages of dollars needed to import goods and has thus seen black market rate soaring to a record 305.
Currently the Naira value is fixed at 197 to 199 per dollar. However Money managing companies which include Aberdeen Asset Management Plc and Duet Asset Management Ltd. have agreed that the only way to resuscitate investor demand in the Nigerian economy will be by letting the currency depreciate. Others also added that the devaluation was inevitable following Brent crude’s slide to a 12-year low of below $30 a barrel.
