Tuesday, 26 January 2016

The Chief Executive Officer, Financial Derivatives
Company Limited, Mr. Bismarck Rewane, has
described the naira as being misaligned, saying
Ghana and South Africa had already moved closer
to equilibrium.
Rewane, who was quoted by Bloomberg as stating
this, said, “The concerns are that the currency is
under pressure, that the currency is misaligned.
“Ghana and South Africa have already moved
closer to equilibrium. Nigeria has not really
accepted that the currency price is in
disequilibrium.”
The Bank of Ghana on Monday kept its benchmark
interest rate unchanged at 26 per cent, in line with
the forecasts of seven of the 10 economists
surveyed by Bloomberg. Kenya’s central bank also
opted last week to extend the pause in its interest-
rate cycle by leaving the policy rate at 11.5 per
cent.
In Nigeria, pressure is mounting on the Governor
of the Central Bank of Nigeria, Mr. Godwin
Emefiele, to devalue the naira and ease foreign-
currency controls that are said to be hurting
businesses and worsening the outlook for growth
in the country.
The CBN’s Monetary Policy Committee, which
started its first meeting of the year on Monday, will
announce the outcome of the meeting on Tuesday
(today).
He surprised market analysts at the last MPC
meeting in November by cutting the benchmark
rate by two percentage points to 11 per cent and
snubbing calls to weaken the currency.
All but one of the 22 economists surveyed by
Bloomberg predicted that Emefiele will leave the
key rate unchanged on Tuesday, with some
predicting an adjustment to the naira rate.
While the CBN has virtually fixed the naira at
197-199 per dollar since March, South Africa’s
rand has plunged about 29 per cent and Ghana’s
cedi is down almost eight per cent in the same
period. The National Bank of Angola, which is set to
hold an MPC meeting on January 29, has gradually
devalued the kwanza since last year as revenue
plunged in sub-Saharan Africa’s biggest oil
producer after Nigeria.
While a record-low rand may force South African
policy makers to take more aggressive action,
Nigeria is set to stick to its looser policy, according
to analysts surveyed by Bloomberg.

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