CBN May Announce A New Exchange Rate Band Of N185-N220 In Q1

In a bid to bring the external and domestic economic variable into equilibrium, the Central Bank of Nigeria (CBN) may announce a new exchange rate band, with a floor of N185 and a ceiling of N220 in the first quarter of this year.
Some analysts are confident that the apex bank may unveil the new band when the Monetary Policy Committee (MPC) meets in two weeks, at a time when there are mixed signals on the direction of monetary policy in Nigeria. 
Bismarck Rewane, Chief Executive Officer (CEO) of Financial Derivatives Company (FDC) said interest rate will likely respond to the new band.
Money market rates are already at an all time low. 
“We expect to see a creeping up of rates as the level of government borrowing increases”, he said.
The anticipated adjustment in the exchange rate band is expected to slowdown the rate of depletion, already below $29 billion, as the demand pressure eases. 
“However with oil prices still soft at $37 billion, the likelihood of an accretion is slim”, he explained.
Last week, the naira  in the interbank market appreciated against two of three currencies within our coverage, said Cordros Capital. The 0.9 local currency fell by 0.45 per cent and 0.08 per cent respectively against the dollar and 0.9 Euro to close at N199.20/$ and N217.13/€. 
On the other hand the naira 0.8 appreciated against the pound by 0.95 per cent to close at N291.25/£. The CBN intervened in the market on Thursday, but characteristically sold less than available demand.

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