Naira Needs Devaluation - Segun Agbaje, GTBank CEO - Business -

* GTBank CEO says 10% fall vs dollar will allow naira to settle * Nigerian local bond yields may rise as much as 200bps Nigeria needs to devalue the naira as falling oil prices and the global markets rout this week mean the currency’s exchange rate is unsustainable, according to biggest local bank by market value. “There’s only one way the currency can go,” Segun Agbaje, chief executive officer of Lagos-based Guaranty Trust Bank Plc, said in a conference call on Tuesday. “As a country, we have to make the difficult decision. At the current oil price and with what’s happening in the world, we’ll have to deal with some measure of devaluation. ”A devaluation of about 10 percent against the dollar would be enough for the naira to “settle,” he said. The central bank of Africa’s biggest economy and oil producer introduced curbs on currency trading after the naira fell to a record low of 206.32 per dollar on Feb. 12. That’s stabilized the unit at an average of 198.94 since the start of March and left it overvalued, according to investors including Ashmore Group Plc and Aberdeen Asset Management Plc. In June, the Abuja-based regulator also stopped importers of 41 items including furniture and textiles from accessing official foreign-exchange markets in a further bid to prop up the currency. Agbaje said local bond yields may rise by 100 to 200 basis points as the government boosts its borrowing to make up for a shortfall in oil revenues, which make up about two-thirds of state revenue. He didn’t specify a time period for the potential market movements. Average naira government bond yields were 15.7 percent on Aug. 24, the highest among 31 emerging markets tracked by Bloomberg.