Financial regulation continued to narrow space , fear of facing a currency crisi

 

 

 

Financial regulation continued to narrow space , fear of facing a currency crisis in Nigeria

 

 

The article quoted analysts view that in order to defend the stability of the currency , Nigeria 's central bank monetary policy has taken a number of measures to gradually weaken the marginal effect of the policy , the future of monetary policy has limited space ; while fiscal policy in stabilizing the exchange rate is expected to play a pivotal role in Denis fiscal room for maneuver is very limited , it is difficult to enhance market confidence. Analysts believe that in the current account surplus of $ 30 billion , the international crude oil prices remain above $ 100 a barrel , the Nigerian foreign exchange reserves should be reduced rather than increased , thus questioning the lack of effective regulation of Nigeria 's oil revenues .

 

Nigeria " Business Daily " recently published an article analyzed the current international oil prices relatively stable background , Nigeria 's foreign exchange reserves and oil premium account (ECA) has continued to shrink, resulting in can be used to deal with the financial turmoil in the financial space narrowing , highlighting Naira devaluation Nigerian central bank to further stress and difficulty of maintaining a stable exchange rate . This paper summarizes the three characteristics indicate possible further devaluation of the naira exchange rate :

 

One is to reduce the size of foreign exchange reserves and oil premium account , Nigeria continued to weaken the financial ability to resist risks . As of February 6 , Nigeria 's foreign exchange reserves $ 42.51 billion , down by 2.3 percent since the beginning , since the beginning of 2013 decreased by 4.1 %. Oil premium account balance from $ 8.65 billion at the end of 2012 fell to $ 2.28 billion at the end of 2013 , analysts believe that by 2015 the funds in the account may be completely depleted.

 

The second is the official and black market exchange rate spread is too large, the birth of the foreign exchange speculation. Currently, the Nigerian Central Bank official rate of U.S. $ 1 = 155.75 naira , while the black market rate of U.S. $ 1 = 168.5 naira , the spread of nearly 1,300 points , gave currency traders arbitrage and speculative space. More and more investors are converted to Naira funds for other foreign currency deposits , increasing the downward pressure on naira .

 

Third, the Fed gradually withdraw QE , may lead to the flow of capital . Nigeria 's central bank deputy governor said the 2013 fourth quarter data showed a significant reduction in foreign direct investment and portfolio investment Nepal absorbed .

EDITED BY CHINA STONE COATED STEEL ROOF TILES