Experts Push for New Exchange Rate of N275-N285/Dollar

Experts have kicked for an upward review of the official ex­change rates from the current N197 to N275-N285 to a dollar, as Monetary Policy Committee, MPC, of the Cen­tral Bank of Nigeria, CBN, commences their meeting today, Monday, May 22.

This call is coming on the heels of the sustained pressure on domestic out­put and elevated headwinds in the economy.

Key indicators in the econ­omy continue to worsen on the back of prolonged foreign exchange (FX) supply bottlenecks, delayed budget implementation, petrol market crisis, galloping inflation; which is dragging consumer spending, negative gross do­mestic product (GDP) growth rate and weaker corporate earnings.

However, financial experts said the recent policy pronouncement by the Minster of State for Petroleum Resources,Ibe Kachikwu, on guided deregulation of the petrol market is ex­pected to take the centre stage given the impact on key monetary policy variables going forward.

The Naira remains weak because of the excess demand over sup­ply. Following the announcement of a new pump price, the value of the Naira depreciated further at the parallel mar­ket by 9.58per cent to N355/$ as at May 16, from N321/$ before the announce­ment of the increase in fuel price.

Latest GDP numbers released by the National Bureau of Statistics (NBS) in­dicates that Q1:2016 GDP contracted to 0.36per cent Y-o-Y (as against 3.94per cent growth in Q1:2015) as structural challenges in the system bites harder.

Meanwhile, Consumer Price Index (CPI) for April released earlier in the week indicated that inflation rate gal­loped to 13.7per cent in April, 2.3per cent point higher than 11.4 per cent in February, just before the last MPC meeting.

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