Naira Devaluation Bets Jump Most on Record on Policy Review
- Forwards predict 16 percent devaluation in next three months
- Review ‘may feature’ devaluation, Nigeria’s VP Osinbajo says
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Traders raised bets on a devaluation of Nigeria’s naira by the most on record after the vice president of Africa’s biggest economy said it was carrying out a “substantial review” of its foreign-exchange policy.
Naira three-month non-deliverable forwards weakened to 237 against the dollar, before paring losses to trade 7 percent lower at 230 by 5:11 p.m. in London, still the biggest drop since the contracts started trading in March 2011. That’s implying a 16 percent devaluation in the period from the spot price of 199.05 per dollar, up from 7.5 percent on Wednesday. Twelve-month NDFs fell 6.2 percent to 289.5, suggesting the naira will weaken 45 percent.