08 March 2019 : At the end of 2018, the ECB officially announced the end of its €2.5 trillion stimulus program, signaling the end of Quantitative Easing across the western world. Analysts recall that post-2008, various Central banks embarked on monetary stimulus programs to improve demand in their economies and bail out distressed Systemically Important Banks. The expectation was that the bank would subsequently embark on a policy normalization path, with interest rates rising across member countries. 

Notably, the U.S. had already begun to do this, with the U.S. Federal reserve hiking rates nine times between 2015 & 2018 and planning at least three more hikes in 2019. However, amidst slower than expected global growth, driven by rising protectionist actions, the rhetoric has changed. Specifically, the U.S. Fed adopted a more dovish stance at its January meeting and the ECB recently announced plans to hold interest rates at their current historic low “at least through the end of 2019”. More interesting, however, is that the ECB has seemingly backtracked, introducing the Targeted Long-Term Refinancing Operation (TLTRO III), another stimulus program which is scheduled to run until March 2021 and will help banks roll over €720bn (£617bn) of ECB loans. This is a step back for monetary normalization in advanced economies and analysts expect this to somewhat ease currency pressure on the Naira in 2019. 

Reporting for EasyKobo on Friday , 08 March 2019 in Lagos, Nigeria

Source: Vetiva Capital Management Limited