The CEO of Guaranty Trust Bank has called for Naira devaluation of 10% to allow the currency to settle. According to him, the Naira is not sustainable at current rates because of falling crude oil prices and shocks in the international markets.
Currently the Naira is valued at 199 against the USD on the Inter-bank and hovering around 212 against the USD in the parallel market. A 10% devaluation from here would see Naira touch 220 on the inter-bank and lead to more inflation and economic hardship in the country.
From investors point of view, you should understand that the CEO of GTB is speaking form his Company's point of view. GUARANTY will probably make more money if Naira was devalued so they can sell their Dollars at a higher rate.
While it is true that falling crude oil prices are putting pressure on the Naira we must remember that according to the government about 1 million barrels of crude oil was stolen daily under the previous administration. So that foreign exchange never made it into Nigerian treasury anyway. So now that oil prices have fallen by 50% if NNPC can make sure that 100% of proceeds from the sale of crude oil are reaching the treasury, Nigeria will find itself at the same spot as 2 years ago.
Perhaps some of these banks need to be investigated for hoarding Dollars and indulging in some questionable practices like buying Dollars from CBN at the official rate and selling at the BDC market for a straight profit virtually on a weekly basis while the citizen of the country and the economy as a whole suffers from these sharp practices.
Source - EasyKobo
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