As FX market remains stable
The International Monetary Fund (IMF) on Tuesday, has said that Nigeria’s economic growth currently at 0.55 per cent (year-on-year) would remain fragile at 0.8 per cent by end of this year, just as the nation’s foreign exchange market as at close of yesterday trading remained stable in both the official and unofficial markets.
The recent economy report from the National Bureau of Statistic (NBS), showed that Nigeria’s economy exited from its worst recession in 29 years recently, with Gross Domestic Product (GDP) growth rate for the second quarter (Q2) 2017 grew by 0.55 per cent (year-on-year), representing 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016.
The IMF which just released its World Economic Outlook report in Washington said that the growth though helped by prospects of strong oil output as well as increasing activities in the agricultural sector.
The IMF also said that the Nigeria’s economy will grow faster than South Africa’s in 2017. This is a reverse from the fund’s earlier projection in July that South Africa’s economy will grow by 1 per cent in 2017; while Nigeria will experience a 0.8 per cent economic expansion.
Speaking on Tuesday during the unveiling of the World Economic Outlook report at the organisation’s headquarters in Washington, Maurice Obstfeld, IMF’s chief economist, said rising political uncertainty has reduced consumer and business confidence in South Africa.
Nigeria is expected to emerge from the 2016 recession caused by low oil prices and the disruption of oil production. Growth in 2017 is projected at 0.8 per cent, owing to recovering oil production and ongoing strength in the agricultural sector.
“However, concerns about policy implementation, market segmentation in a foreign exchange market that remains dependent on central bank interventions (despite steps to liberalise the foreign exchange market) and banking system fragilities are expected to weigh on activities in the medium term.”
Meanwhile, the Nigerian currency, Naira, on Tuesday, remained steadied at 363 to the dollar but appreciated further against the Pound sterling from 478 traded on Monday to close at 425 at the yesterday trading.
But at the interbank forex market, the Naira extended its gains to close at 305.10 against 305.60 traded the previous day, representing growth of 0.16 per cent.
On the other hand, the Naira, at the parallel market otherwise referred as the unofficial forex market, relapsed against the Euro to close at 425 compared to 422 traded on the first trading of the week. Even though it gained against the pound sterling and was seen unchanged over the US Dollar.
But at the Nigeria Autonomous Foreign Exchange (NAFEX) window, the Naira, opened at a better rate of 359.79, higher than 359.85 per dollar on Monday and closed at 360,31 stronger than 360.50 sold the previous day.
Even though the NAFEX, recorded a significant drop in the daily turnover with the new closing figure of $86.69 million against $207.20m declared on Monday and weaker than $207.26 exchanged last Friday
It is however, worthy of note that the autonomous forex window has recorded an improving turnover of $1.172 billion in the concluded week, with last Tuesday’s daily turnover of $340.07m, an appreciable traded volume of $257.56 on Wednesday, while extended to $367.44m on Thursday before closing the week on Friday with total volume traded put at $207.26m, representing the lowest traded figure during the considered week, data obtained from FMDQ OTC official website has showed.
Meanwhile, CBN, earlier in the week had continued its intervention in the inter-bank Foreign Exchange (FOREX) market with the injection of $195m.
Figures released by the bank indicated that it offered the total sum of $100m to the wholesale segment, while the Small and Medium Enterprises (SMEs) segment received the sum of $50 m.
The invisibles’ segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others, received $45m. Confirming the figures, the Bank’s Acting Director, Corporate Communications Department, Mr. Isaac Okorafor,said that the injection was in line with the CBN’s pledge of making the Forex market liquid.
Stories by Motolani Oseni