Nigeria Week Ahead – CBN Meeting, Oil & Naira In Focus

Image

By Lukman Otunuga

This will be a big week for Africa’s largest economy as its reveals updates on monetary policy.

The Central Bank of Nigeria (CBN) is widely expected to leave interest rates unchanged at 11.5% in March despite inflation currently well above the 6-9% target.

Central banks across the globe have waged war against rising prices by adopting an aggressive approach towards tighter monetary policy. Examples range from the Federal Reserve, Bank of England, and Bank of Canada among many others.

However, the CBN has made it clear that there needs to be a solid recovery in economic growth before it pulls the trigger on higher interest rates.

It is worth keeping in mind that Nigeria remains exposed to external risks in the form of oil price volatility, geopolitical tensions, rising COVID-19 cases in China, and global growth fears. This could force the CBN to maintain the status quo on interest rates in the second quarter of 2022, even as other central banks take action.

In regards to the Naira, it weakened to a record low of 585 per dollar on the black market last Friday as dollar demand jumped. With the local currency on a slippery decline and likely to weaken further amid dollar shortages, 600 per dollar could be the next key level of interest.

Outside of Nigeria, oil prices appreciated on Monday after Russia-Ukraine talks appeared to be at a standstill. The past few weeks have certainly been volatile for oil which soared to record highs in March before crashing more than 20% last week to sink below $100.

Despite the massive selloff, the fundamentals still remain in favour of oil bulls with geopolitical risks and supply concerns limiting downside losses. As identified in our previous reports, Nigeria exports crude but imports all by-products of the resources.

So, even though rising energy prices may be good news for energy producers, this is stifled by Nigeria’s poor infrastructure, sub-optimal oil production, and fuel subsidies.

On the global front, there will be many key economic reports from major economies and speeches from central bank officials. We could be some market action on Thursday as US President Biden attends the NATO summit. In regards to currencies, the dollar remains on standby ahead of another busy week while gold is trading around $1926.

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Lukman Otunuga is a Senior Research Analyst at FXTM

Share
Related Stories
Image
02-March-2024

Naira Now N1,548.25 at Official Market, N1,560/$1 at Black Market

By Adedapo Adesanya The Naira sustained its gradual recovery against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, March 1, appreciating by 2.94 per cent or N46.86 to sell at N1,548.25/$1, in contrast to the N1,595.11/$1 it was traded on Thursday. Also, in the spot market, the Nigerian currency improved its value against the Pound Sterling during the trading day by N90.13 to close at N1,956.06/£1 versus the previous day’s N2,046.19/£1 and against the Euro, it gained N76.39 to trade at N1,675.25/€1, in contrast to the N1,751.64/€1 it closed a day earlier. The supply of

Image
05-March-2024

Investors Mop up Nigerian Stocks on Economic Optimism

By Dipo Olowookere The Nigerian Exchange (NGX) Limited witnessed a 0.10 per cent growth on Monday amid optimism that the trip of President Bola Tinubu to Qatar over the weekend will yield positive results. At the Nigeria-Qatar Business and Investment Forum in Doha, Mr Tinubu assured Qatari investors that they would not face any bottleneck while attempting to repatriate their funds. This assurance was welcomed by stock investors, who saw light at the end of the tunnel for the nation’s economy, which is currently suffering because of the shortage in the supply of foreign exchange (FX) into the market. Since

Image
02-March-2024

Crude Oil Jumps 2% as Traders Sight Possible OPEC+ Cuts

By Adedapo Adesanya Crude oil appreciated by about 2 per cent on Friday as traders awaited a decision from the Organisation of the Petroleum Exporting Countries and allies (OPEC+) on supply agreements for the second quarter. Yesterday, the price of Brent futures went up by $1.64 or 2 per cent to $83.55 per barrel and the US West Texas Intermediate (WTI) futures rose by $1.71 or 2.19 per cent to $79.97 a barrel. For the week, Brent added around 2.4 per cent while WTI gained more than 4.5 per cent. Analysts noted that the expectation that OPEC+ is going to

Image
04-March-2024

NASD OTC Exchange Records First Weekly Decline in Week 9

By Adedapo Adesanya The NASD Over-the-Counter (OTC) Securities Exchange, for the first time in the 2024 trading year, declined in Week 9 by 3.92 per cent, shrinking the value of investors’ portfolio by N27 billion, as the market capitalisation went down to N1,548 trillion from N1.611 trillion in Week 8. Equally, the NASD Unlisted Security Index (NSI) depreciated by 47.17 points to wrap the week at 1,141.61 points compared with the 1,188.78 points recorded in the previous week. In the week, there was a 65.1 per cent decrease in the total value of securities traded by investors to N620 million

More Stories
Image
21-April-2021

Investors Sustain Demand for Financial Stocks as Index Rises 0.43%

By Dipo Olowookere The hunger for financial stocks was sustained on Tuesday at the market, with Fidelity Bank closing as the most traded equity. Investors traded 125.3 million units of the company’s equities valued at N265.6 million, with Zenith Bank trailing for transacting 26.8 million units worth N575.0 million. UAC Nigeria exchanged 25.8 million shares worth N280.3 million, GTBank transacted 22.8 million stocks for N683.1 million, while FBN Holdings traded 21.1 million shares for N161.6 million. However, these transactions were lesser than the previous session as the trading volume reduced 33.34 per cent to 339.0 million from 508.6 million, the

Image
08-August-2016

Nigerian Breweries Partners FG On Maltina Teacher Of The Year

Determined to give its annual Maltina Teacher of the Year Award more value and to make it more relevant to teachers in different parts of Nigeria, Nigerian Breweries Plc has formalized its partnership with the Federal Ministry of Education as they plan to sign a Memorandum of Understanding (MoU) on how the scheme could be more beneficial to target audience. This was agreed when a delegation from Nigerian Breweries Plc paid a courtesy visit on Prof. Anthony Anwukah, Minister of State for Education; in Abuja last week. Victor Famuyibo, Human Resources Director, Nigerian Breweries Plc; who led the NB delegation

Image
23-January-2018

Upbeat Earnings News May Strengthen US Stocks

By Investors Hub The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks poised to extend the upward move seen in the previous session. Better than expected earnings news from Dow components Johnson & Johnson (JNJ), Procter & Gamble (PG) and Travelers (TRV) may contribute to early strength on Wall Street Stocks moved mostly higher over the course of the trading session on Monday, extending the strong upward move seen last week. With the gains, all three of the major averages reached new record closing highs. The major averages saw further upside going into the

Image
08-June-2023

Joint Military Task Force Vows to Go After Oil Thieves

By Adedapo Adesanya The joint military task force operating in the Niger Delta region with the codename Operation Delta Safe has affirmed its commitment to eliminate crude oil theft, illegal refining and illegal oil bunkering activities in the country, in line with the directive of President Bola Tinubu. The Commander of Operation Delta Safe, Rear Admiral Olusegun Ferreira, affirmed this in Port Harcourt, Rivers State, on Wednesday, during his maiden visit and familiarization tour to units under OPDS. Mr Ferreira said the visit was imperative to assess the operational tempo of the joint task force in line with its mandate

Image
02-April-2021

EFCC Arraigns Three over Illegal Petrol Transactions

By Adedapo Adesanya The Economic and Financial Crimes Commission, (EFCC) has arraigned three persons before Justice J.K. Omotosho of the Federal High Court in Port Harcourt on two count charges bordering on conspiracy and illegal dealing in petroleum products without an appropriate licence. The suspects, Enemo Okoria, Ebhofage Brown and Francis Dapagamo, were arraigned along with a tugboat DP28 and a firm, Diesel Power Nigeria Limited. According to EFCC, the accused persons were arrested along the Onne waterways on April 20, 2018, by operatives of the Nigerian Navy Ship, NNS Pathfinder while transshipping 261,000 litres of suspected illegally refined automotive

Image
30-January-2023

Orevaoghene Whiskey Emerges InterswitchSPAK 4.0 Winner

By Modupe Gbadeyanka A student of Top Faith International School, Akwa Ibom State, Miss Orevaoghene Whiskey, has won the fourth edition of the prestigious InterswitchSPAK National Science Competition. She is now the first female winner of the 13-week Science, Technology, Engineering and Mathematics (STEM) show, which had over 20,000 applications across the country. With the win, the 16-year-old best STEM student in Nigeria will receive the grand prize of N7.5 million in scholarships, among other exciting prizes. InterswitchSPAK Nigeria is the corporate social responsibility (CSR) initiative of Africa’s leading integrated payments and digital commerce company, Interswitch. The programme aired on

Image
20-November-2021

Makinde Pays N14bn Gratuities to 5000 Pensioners

By Modupe Gbadeyanka About 5000 pensioners have received over N14 billion as gratuities from the Oyo State government, the Commissioner for Information, Culture and Tourism, Mr Wasiu Olatunbosun, has disclosed. In a statement issued on Friday, the Commissioner said the Governor of Oyo State, Mr Seyi Makinde, has made this possible because of his love for pensioners. Mr Olatunbosun confirmed this development when he received an award of excellence tagged Defender of Pensioners at a gala night and award-giving ceremony organised by the Nigerian Union of Pensioners (NUP), South-West Zone, on Thursday, November 18, 2021. He revealed that the Oyo

Image
07-July-2020

Senate Passes Bill Against Harassment in Tertiary Institutions

By Adedapo Adesanya The Nigerian Senate on Tuesday passed a bill that prohibits sexual harassment of students in tertiary institutions, making the offence punishable by 14 years jail term and N5 million fine. The bill passed third reading after a clause by clause consideration of the report from its committee on Judiciary Human Rights and Legal Matters, led by the Chairman, Mr Opeyemi Bamidele (All Progressives Congress, Ekiti Central). According to the provisions of the bill, any educator found guilty of committing an offence of sexual harassment is liable on conviction to 14 years imprisonment or a fine of N5

Ad
Ad
Recent Stories
Image
05-March-2024

Banks Involved in 70% of Economic Crimes in Nigeria—EFCC

By Aduragbemi Omiyale Nearly 70 per cent of financial crimes in Nigeria have the involvement of banks, the Economic and Financial Crimes Commission (EFCC) has claimed. “Broadly speaking, banking fraud in Nigeria is both inside and outside related. “The inside related fraud comprises outright selling of customers’ deposits, authorising loan facilities, forgery and several other kinds of unhealthy and criminal practices,” the chairman of EFCC, Mr Ola Olukoyede, said while speaking at the Annual Retreat and General Meeting of the Association of Chief Audit Executives of Banks in Nigeria held in Abuja. The EFCC boss, represented by the agency’s Director

Image
05-March-2024

Nigerian Air Force Airstrikes Hit Two Illegal Refineries in Rivers

By Adedapo Adesanya The Nigerian Air Force component of Operation Delta Safe, through airstrikes destroyed two illegal oil refining sites in Krakama and Temakiri, Degema Local Government Area of Rivers State, in continuation of efforts to stamp out the activities of crude oil thieves and oil pipeline vandals in the country. This was disclosed by the Director of Public Relations and Information, Nigerian Air Force, Mr Edward Gabkwet, an Air Vice Marshal, saying the illegal oil refining sites were observed actively operating with Cotonou boats sighted nearby with the probable intent to illegally siphon crude oil from the sites. Mr

Image
05-March-2024

NGX Remains Catalyst for Economic Growth—Chiemeka

By Aduragbemi Omiyale The acting chief executive of the Nigerian Exchange (NGX) Limited, Mr Jude Chiemeka, has described the bourse as a catalyst for economic growth and development. He said this at the listing of 7.5 billion ordinary shares of Transcorp Power Plc at N240 per unit at the exchange on Monday. The energy firm raised the market capitalisation of the trading platform by N1.8 trillion yesterday. According to him, the inclusion of Transcorp Power into the NGX, the first listing of the year, underscored the pivotal role the bourse plays in shaping Nigeria’s economic landscape. He added that NGX

Image
05-March-2024

Dangote Renames Lagos Refinery Road After Herbert Wigwe

By Modupe Gbadeyanka The road to the Dangote Refinery in the Lekki area of Lagos State has been renamed after the late group chief executive of Access Holdings Plc, Mr Herbert Wigwe. This development was announced on Monday night by the owner of the oil facility, Mr Aliko Dangote, during the Celebrating Herbert Wigwe’s Professional Legacy, who said this gesture was to immortalise his friend. The Nigerian billionaire businessman and the richest black man on earth, in an emotional tribute to the late banker, who died in a helicopter crash in the United States on February 9, 2024, along with

Image
05-March-2024

Investors of Unlisted Securities Lose N43bn

By Adedapo Adesanya It was a bad day for investors of unlisted securities in Nigeria as the NASD Over-the-Counter (OTC) Securities Exchange ended the first trading session of the week on a negative note with a 3.11 per cent loss triggered by four stocks on the platform. The culprits were UBN Property Plc, Aradel Holdings Plc, Central Securities Clearing System Plc, and Resourcery Plc. They were under selling pressure during the trading session. This resultantly trimmed N43 billion from the market capitalisation of the bourse to N1.449 trillion from N1.542 trillion, as the NASD Unlisted Security Index (NSI) dropped 35.53

Image
05-March-2024

Naira Value Improves at Official Market, Deflates at Parallel Market

By Adedapo Adesanya The Naira appreciated further against the greenback in the Nigerian Autonomous Foreign Exchange Market (NAFEM) segment of the FX market on Monday, March 5 by N14.06 or 0.9 per cent to trade at N1,534.19/$1 compared with last Friday’s value of N1,548.25/$1. The improvement in the value of the domestic currency happened as the forex market attempts to find stability after months of turbulence due to a shortfall in the supply of Dollars into the system. Yesterday, the value of forex trades depreciated by 39.7 per cent or $117.37 million to $178.63 million from the $296.00 million recorded

Image
05-March-2024

Oil Market Falls Despite OPEC+ Cut Extension

By Adedapo Adesanya  The oil market fell slightly on Monday, as demand headwinds outweighed a widely expected extension of voluntary output cuts through the middle of the year by the Organization of the Petroleum Exporting Countries and its allies (OPEC+). Brent futures dropped 81 cents to quote at $82.74 a barrel while the US West Texas Intermediate (WTI) weakened by $1.22 to trade at $78.75 a barrel. The OPEC+ producers agreed over the weekend to extend their voluntary oil output cuts of 2.2 million barrels per day into the second quarter to cushion the market amid global economic concerns and

Image
05-March-2024

Investors Mop up Nigerian Stocks on Economic Optimism

By Dipo Olowookere The Nigerian Exchange (NGX) Limited witnessed a 0.10 per cent growth on Monday amid optimism that the trip of President Bola Tinubu to Qatar over the weekend will yield positive results. At the Nigeria-Qatar Business and Investment Forum in Doha, Mr Tinubu assured Qatari investors that they would not face any bottleneck while attempting to repatriate their funds. This assurance was welcomed by stock investors, who saw light at the end of the tunnel for the nation’s economy, which is currently suffering because of the shortage in the supply of foreign exchange (FX) into the market. Since

Image
04-March-2024

UK Announces £37.3m to Boost Livelihoods in Nigeria, Others

By Adedapo Adesanya The United Kingdom has announced new funding for the Mobile for Development Programme to help more people access mobile and digital technologies to find new opportunities and boost their livelihoods in Nigeria and other developing countries. UK’s Minister for Development and Africa, Mr Andrew Mitchell MP, during a speech at Mobile World Congress last week, announced that the UK is providing £37.3 million of new support for the Mobile for Development Programme. The new UK funding for innovative mobile phone technology will help change lives in developing countries around the world by harnessing AI technology to provide

Image
04-March-2024

Newly-Listed Transcorp Power Targets N500bn Revenue by 2031

By Adedapo Adesanya The latest company to join the Nigerian Exchange (NGX) Limited, Transcorp Power Plc, has announced a revenue target of N500 billion by 2031, tapping opportunities in the capital market and sustainable energy. This was disclosed by the Managing Director of the firm, Mr Peter Ikenga, during the Facts Behind the Listing held at bourse on Monday. The firm, owned by businessman and Chairman of UBA Plc, Mr Tony Elumelu, listed its stocks on the Main Board of the nation’s flagship exchange by introduction. It listed 7,500,000,000 ordinary shares of 50 Kobo each at N240.00 per share. Speaking