13 November 2018 : The Naira continues to witness stability against a broadly stronger Dollar despite other emerging market currencies feeling the heat. While the Naira’s resilience is somewhat encouraging, the price paid to keep the local currency buoyed is becoming increasingly discouraging. Defending the Naira has sent the nation's foreign exchange reserves slipping to an 8-month low. With Oil prices briefly entering a bear market last week, it may become a headache for the Central Bank of Nigeria to defend the Naira against an appreciating Dollar.
Investors will keep a close eye on Nigeria’s three-day Bond roadshow in London which kicks off today. Confidence over the recovery of Africa’s largest economy could receive a boost if the roadshow proves to be successful and enough funding is received to help with the implementation of the 2018 record high budget.
There will be a special focus on Nigeria’s inflation figures on Wednesday which could impact speculations over whether the Central Bank of Nigeria will cut interest rates before year end. Signs of rising inflationary pressures are likely to push expectations of a CBN rate cut in 2019, possibly before the presidential elections.
Source: Lukman Otunuga, FXTM Research Analyst
Reporting for EasyKobo on Tuesday , 13 November 2018 in Lagos, Nigeria
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