Jan 26 (Lagos) - Today, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria wraps up its first two-day meeting for 2016, with the global and domestic macro landscape largely unchanged since the last meeting in November.
On the external front, monetary policy is set to remain divergent as the ECB at its January 2016 meeting, noted that its monetary stimulus had no bounds even as the US Federal Reserve’s rate normalisation is expected to persist. At home, extended decline in oil prices which plumbed to 12 year lows of $28/bbl recently, continues to bruise domestic economic variables. Consequently, we expect monetary policy environment to remain accommodative.
That said, this meeting is likely to be dominated by currency concerns, given recent developments in the foreign exchange market where parallel market rates have climbed to record peaks of N300/$ (vs. N250/$ at the November MPC). However, the question is not whether there should be devaluation or not, but how the foreign exchange market should operate going forward to ensure efficient allocation of forex.
To engender improvement in forex allocation, analysts at Asset & Resource Management Ltd in Ikoyi still think that the CBN would need to ease forex restrictions and allow market forces take a greater foothold remains the way forward.
reporting for easykobo.com on Tuesday, Jan 26 2016 from Lagos, Nigeria
Source - Analysts at Asset & Resource Management Ltd in Ikoyi
If you would like to post comments! Please log in.