Deutsche Bank Adds Nigeria to Forex Watchlist, Sees Further Naira Gains

Deutsche Bank has added Nigeria to its frontier foreign exchange monitor, identifying the naira as undervalued and attractive to foreign investors betting on further appreciation of the currency against the United States dollar.
The German multinational bank said Nigeria’s relatively high real interest rates and improving external position could support the naira’s outlook, strengthening the appeal of local currency assets to carry trade investors seeking to profit from interest rate differentials between currencies.
However, the lender warned that rising government borrowing and fiscal pressures could threaten the currency’s positive performance, particularly as the country approache...