Friday, March 03, 2017 9:03 AM / FDC
The Nigerian forex market was positively stunned by a 14% appreciation of the naira in 7 days after an extraordinary CBN intervention of $700m in the spot market. The naira had lost over 40% of its value in the last 9 months ever since the CBN announced a flexible exchange rate policy but unfortunately operated a managed fixed exchange rate market.
Some analysts had hastily jumped to the conclusion that the structural misalignment of the currency was now resolved and that the naira will only appreciate further.
We are of the view that the crisis of liquidity and confidence needs more than spasmodic quantities of dollar supply to restore confidence in the market.
Without a transparent supply process and a commitment of funding for both tradables (imports) and invisibles (services) the naira will continue to oscillate.
The crisis of supply can be temporarily addressed but the confidence deficit needs a much more comprehensive approach to achieve a level of exchange rate stability.
At this month’s LBS breakfast club session, Bismarck Rewane and the FDC Think Tank analyse the impact of the new forex process on the economy and business.
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2. 2017: A Year of Fear Laced with Hope
3. Running Faster to Stand Still – LBS EBS – Dec 2016
4. Recovery Fades, Strong Regulator versus Efficient Markets – LBS EBS Nov 2016
5. Nigeria Oil Shock 2.0 and the Treacherous Path to Recovery – LBS EBS Oct’16
6. Recession: how deep and for how long? – LBS EBS Sep’16
7. Policy Daunting, Markets Uncertain, Citizens Groan – LBS EBS – Aug 2016
8. With Inflation at 16.5%,Nigeria Stumbles into the Reform Path-LBS EBS Jul 2016
9. Sell in May and Go Away - LBS EBS - May 2016
10. The Squandering of a Golden Economic Opportunity – LBS EBS Apr 2016
11. Naira Weakness Undermines Economic Stability – LBS EBS – March 2016
12. 2016: The Year of Stark Economic Reality – LBS EBS – Feb 2016
13. 2016 - A Year of Growth and Commodity Turmoil – LBS EBS – Dec 2015
14. Fantasy economics & the value of the Naira – LBS EBS – Nov 2015
15. All the Presidents’ Men - Dream team or Lightweights – LBS EBS – Oct 2015
16. Loot Recovery? Restitution is no Retribution - LBS EBS – Sep 2015
17. Nigeria goes back to the Future : Market vs. Control Economy - LBS EBS - Aug 2015
18. Buhari: Slow Start or Guessing Game – LBS EBS – July 2015
19. Reflating a Strangulating Economy – LBS EBS – Jun 2015
20. Leadership Change is not a System Change – LBS EBS April 2015
21. Is the Naira Ever Going to Recover? – LBS EBS – March 2015
22. Nigeria at Crossroads- Stability or Change, Which do You Prefer? -LBS EBS – Feb 2015
23. The Falling Naira: Are you Prepared? - LBS EBS- Jan 2015
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