• Tuesday, March 19, 2024
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Over $6bn flown into local bond market post-election – CBN

Presidency: Emefiele files lawsuit, seeks constitutional interpretation

Following the conclusion of the general elections, over $6 billion has been flown into the local bond market in one month, indicating confidence in the economy, according to Godwin Emefiele, governor of the Central Bank of Nigeria (CBN).

He spoke at post-election outlook conference with the them, ‘An Agenda For Economic Growth and Business Confidence’, organised by BusinessDay Media Limited, in Lagos.  

In Q4 2018 the market experienced some capital flight from FPIs (primarily due to US policy normalisation) and the CBN stepped up to provide support by intervening in the market.

Since the start of this year, inflows from Foreign Portfolio Investors (FPIs) have picked up. Their funds currently account for at least 50 percent of inflows at the I&E window.

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Emefiele predicts the economy to pick up in 2019, forecasting a gross domestic product growth of 3 percent, up from 1.9 percent recorded last year.

He sets the post-election agenda for the nation’s monetary policy, projecting that the current monetary policy stance of the Bank is expected to continue.

Emefiele noted that the Bank would adjust the policy rate in line with unfolding conditions and outlooks. Just as in the previous year, he said the Bank would continue in its drive to ensure that the policy interest rate is set to balance the objectives of price stability with output stabilization.

While basing the inflationary projection on productivity gains in the agricultural and manufacturing sectors, he said the Gross Domestic Product (GDP) would be expected to pick up in the first half of the current year owing largely to the continued efforts at driving indigenous production in high-impact real sector activities.

On the exchange rate policy, he said the Bank, in spite of expected pressures from the volatility in the crude oil markets, would maintain its stable exchange rate over the next year. According to him, “Gross stability is projected in the foreign exchange market, given increased oil production and contained import bill.”

Emefiele expressed optimism that the country’s Balance of Payments would remain positive in the short-term, adding that the current account balance could improve further if oil prices continued to recover. He assured that this would be “supported by improved non-oil performance as diversification efforts begin to yield results to reduce undue imports.”

While warning that the issues that led to the economic crisis between 2015 and 2017 remained visible, Emefiele stressed the need to significantly increase the country’s policy buffers, including fiscal measure, to increase its external reserve. He also reiterated the need to diversify the revenue structure of the Federal Government, in order to reduce dependence on direct proceeds from the sale of crude oil.