3 December 2018 : Emerging market currencies could remain supported after dovish remarks from Federal Reserve Chairman Jerome Powell weighed heavily on the US Dollar.
However, the Nigerian Naira may struggle to reap the full benefits of a weakening Dollar due to heavily depressed Oil prices. Although expectations of the Fed raising interest rates less than expected may reduce capital outflows, the Naira remains heavily influenced by Oil markets. With Oil prices sinking to a fresh yearly low today, this not only impacts government revenues, but economic growth and the nation’s ability to enact the 2019 budget which pegged the Oil price at $60 per barrel. If falling reserves result in the CBN being unable to defend the Naira, this will weigh heavily on the local currency.
Source : Lukman Otunuga, FXTM Research Analyst
Reporting for EasyKobo on Friday , 30 November 2018 in Lagos, Nigeria
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