Annual
inflation eased for the seventeenth consecutive month, while positive core
economic metrics pointed to further signs of improving stability. Elevated
global Oil prices have boosted government reviews and heavily supported foreign
exchange markets. The overall outlook for Nigeria remains positive, especially
when considering how the IMF has raised its growth forecast and the World Bank
has indicated its willingness to provide the nation with technical support.
According
to the IMF, Nigeria’s economic growth rate in 2019 is projected to hit 2.3%, an
improvement from the earlier 1.9% forecast thanks to an improved outlook on
global Oil prices. As we head into the second trading month of Q2, there is
likely to be an increasing focus on the Central Bank of Nigeria. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
With inflation pressures easing and economic conditions improving, the burning
question among investors is when interest rates will be cut.
Consumer
prices in the largest economy in Africa have cooled, from 11.61% in May to
11.23% MoM in June, its slowest pace in over two years. With inflationary
pressures clearly becoming a theme of the past and gravitating closer to the CBN’s
6% - 9% target, logic states that a rate cut could be around the corner.
However, external and domestic risks ranging from global trade tensions,
prospects of higher US interest rates and political risk at home could sabotage
the central banks to cut rates. A sense of uncertainty ahead of the 2019
elections coupled with the possibility of pre-election spending stimulating
demand-pull inflation could complicate matters for the CBN.
Escalating
global trade tensions remain a significant threat to global growth and
stability which is bad news for Emerging Markets. With trade tensions
escalating between Nigeria’s two biggest trading partners, the nation could be
caught in the firing line like many other emerging market currencies. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
An appreciating Dollar and the Federal Reserve’s monetary policy strategy may
also play an important role in when or if the CBN takes action. Market
expectations remain elevated over the Federal Reserve raising US interest rates
two more times this year, which may spark capital outflows from Emerging
Markets. While a rate cut in Nigeria has the ability to boost economic growth
by promoting spending and investment, it may widen the monetary policy
divergence between the Fed and CBN.
What
seemed like an easy decision for the CBN could turn difficult as the year
progresses, especially when factoring in how the bullish sentiment towards the
US economy has boosted speculation of a Fed rate hike. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Will the CBN be willing to widen the US - Nigeria interest rate differential to
pursue economic growth? Or will rates be left unchanged in a bid to prevent any
unexpected downside shocks ahead of the general elections in 2019?
With
Oil prices vulnerable to losses amid a possible return of oversupply concerns
and Dollar strength remaining a dominant market theme, this toxic combination
may present downside risks to Nigeria’s economic recovery. If second-quarter
economic growth prints above market expectations and domestic inflation cools
to single digits, the CBN could be given an opportunity to cut interest rates
in Q4.
Have you heard this? Many
Nigerian exporters have been defrauded of huge amount of money in the process
of exporting commodities to foreign countries. Do you know why? They were not
trained on export operations, management, documentations and the best methods
of payment in export trade. This is terrible!!! Nigerians cannot continue to
lose money to foreigners in the course of export business. Exporters, why don’t
you get a practical manual that teaches the stages of export trade from
processing and packaging of commodities to receipt of payment by the foreign
buyers. It teaches export operations, export management, export documentations
and methods of payment in export trade? It is a contemporary step-by-step guide
to export trade. It tells all the contemporary dynamics in export trade. To get
it, click on the link below:
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