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Fischer Says Fed Getting Close to Reaching Goals, Raising Rates

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Stanley Fischer
  • Fischer Says Fed Getting Close to Reaching Goals, Raising Rates

Federal Reserve Vice Chairman Stanley Fischer said the central bank has almost reached its goals for maximum employment and price stability, strengthening the case for raising interest rates.

“In my view, the Fed appears reasonably close to achieving both the inflation and employment components of its mandate,” Fischer said in the text of remarks to be delivered at a conference at the Central Bank of Chile. “Accordingly, the case for removing accommodation gradually is quite strong, keeping in mind that the future is uncertain and that monetary policy is not on a preset course.”

The Fed has lifted its main interest rate just once since cutting it to near-zero in 2008, in December 2015. Policy makers have signaled that a second increase is imminent as employers continue to hire, wages creep up and price pressures climb, and federal funds rate pricing suggests that markets anticipate an hike at the Fed’s Dec. 13-14 meeting. That would set the central bank apart from its global counterparts, which are still in easing mode.

“There is likely to be considerable policy rate divergence for some time,” Fischer said by video to the conference in Santiago. His speech focused on the global fallout from Fed policy. “I am reasonably optimistic that the spillovers from ongoing U.S. normalization will be manageable for the foreign economies.”

Fischer also expressed confidence that global risks to the Fed’s own outlook had diminished.

“Financial market conditions have generally improved relative to earlier in the year, with even the initial market turbulence following the Brexit vote appearing fairly short lived,” he said, referencing Britain’s June 23 referendum to leave the European Union. “I am cautiously optimistic that the drag on the U.S. economy and inflation from past dollar appreciation may have mostly worked itself out, and that foreign economies are on a somewhat more secure footing that poses smaller downside risks to the U.S. economy.”

Fischer said the Fed will remove accommodation “only in response to an outlook for improving economic conditions and firming inflation,” which should help to support economies abroad. He added that emerging market economies have “markedly improved fundamentals” relative to several years ago, which should help to mitigate spillovers.

More Slowly

What’s more, “U.S. policy rates are likely to increase more slowly, and by a lower cumulative amount, than in past episodes of U.S. monetary tightening,” he said. “This in turn should reduce the divergence between the stance of U.S. and foreign monetary policies and the associated spillovers arising from such divergence.”

Fischer’s tone suggests that he didn’t feel a need to talk markets out of the rate hike they anticipate next month after Republican Donald Trump’s election victory earlier this week.

The shock win on Nov. 8 initially sent stock markets plunging, but equity prices have since recovered and bond yields risen in anticipation of the tax cuts and infrastructure investment he promised voters.

Continued economic strength is giving officials reason for confidence that gradual, upward rate path will be appropriate. Unemployment is hovering below 5 percent, less than half the level of its 2009 high, and headline inflation moved up to 1.2 percent in the 12 months through September. That’s still shy of the Fed’s 2 percent goal, but core inflation — which strips out volatile food and fuel prices — has reached 1.7 percent.

“A noticeably faster U.S. recovery would require a more rapid removal of U.S. accommodation and could exert noticeably larger spillovers abroad by putting more upward pressure on foreign interest rates and by inducing larger depreciations of foreign currencies,” Fischer said. While uncertainty “is a constant feature of the landscape we confront as policymakers, both the U.S. and global economies will be served best if we keep our own houses in order.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Forex

Investors Transacts Forex Worth $3.01 Billion at the NAFEX Window in June

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U.S Dollar - Investors King

The value of transactions traded at the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) stood at $3.01 billion in June, according to the data published by the FMDQ Group and seen by Investors King.

This represents an increase of 19.4 percent when compared to the $2.52 billion recorded in the month of May.

On Friday 23, July 2021, investors’ transaction value was estimated at $135.28 million.

The NAFEX was introduced by the Central Bank of Nigeria in April 2017 in response to the continuous fall of the Naira.

In the FMDQ Group introductory statement of NAFEX window, the group said “This Market Notice is issued pursuant to the Central Bank of Nigeria (“CBN”) circular dated April 21, 2017 (Ref: FMD/DIRCIR/GEN/08/007) and titled Establishment of Investors’ & Exporters’ FX Window which provides in clause 4.0 that in order to support appropriate benchmarking and facilitate derivatives activities in the newly established Investors’ & Exporters’ FX Window (the “Window”), FMDQ OTC Securities Exchange (“FMDQ”) will be developing and publishing a new fixing called NAFEX – the Nigerian Autonomous Foreign Exchange Rate Fixing.

“NAFEX is the FMDQ reference rate for foreign exchange (“FX”) activities in the Investors’ & Exporters’ FX Window and is designed to represent Spot FX market rates in the Window. NAFEX rates will be generated independently and objectively and published every business day at 12 noon or at a time advised by FMDQ.”

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Naira

Naira Exchange Rates Today, Monday, July 26, 2021

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Naira Exchange Rates - Investors King

Economic uncertainty in Africa’s largest economy Nigeria continues to weigh on the Nigerian Naira despite numerous efforts by the Central Bank of Nigeria to prop up the Naira value against global counterparts. The Nigerian Naira opened the week at N504 to a United States Dollar at the parallel market popularly known as the black market.

While against the British Pound and European single currency, it traded at N705 and N595, respectively.

At the Central Bank of Nigeria’s regulated forex segment, the NAFEX, Naira stood at N411.50 to a United States Dollar but was quoted by the Central Bank of Nigeria at N410.14 to the United States Dollar.

The inability of the Central Bank of Nigeria to service the economy with enough forex liquidity has impeded economic activities, escalated inflation rate to 17.75 percent in the month of June and drove the unemployment rate to 33.33 percent despite oil price hitting $75 per barrel before moderating to $70 last week.

The oil-dependent nation’s foreign reserves remained lackluster at $33.171 billion, largely due to OPEC+ plus production cuts agreement and other internal issues. The dwindling foreign reserves has hindered central bank’s intermittent forex intervention aimed at supporting the Naira value and stimulating productivity across the economy.

Naira traded at N500, N705 and 595 to the United States Dollar, the British Pound and the Euro at the Bureau de Change forex section. See other Naira Exchange rates in the tables below.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
26/07/2021 500/504* 698/705* 588/595* 62/69 407/415 300/320
23/07/2021 500/504 698/705 588/595 62/69 407/415 300/320
22/07/2021 498/503 695/703 585/590 62/69 407/415 300/320
19/07/2021 495/503 698/705 585/592 62/69 407/415 300/320
16/07/2021 502/506 700/708 590/596 62/69 407/415 300/315
15/07/2021 500/505 700/708 590/596 62/69 407/415 300/320
14/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
13/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
12/07/2021 500/505 700/708 590/595 62/69 407/415 300/320
09/07/2021 500/505 700/708 588/593 62/69 407/417 300/320
08/07/2021 499/503 700/708 588/593 62/69 407/417 300/325
07/07/2021 499/503 700/710 588/593 62/69 407/417 300/325
06/07/2021 499/503 698/710 590/595 62/69 407/417 300/325

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
26/07/2021 490/500 694/705 580/595
23/07/2021 490/500 694/705 580/595
22/07/2021 490/500 690/705 580/595
19/07/2021 490/500 690/707 580/595
16/07/2021 490/500 700/710 585/600
15/07/2021 490/500 698/710 585/600
14/07/2021 490/500 698/710 590/595
13/07/2021 490/500 697/710 585/600
12/07/2021 490/500 698/710 585/600
09/07/2021 490/500 698/710 585/600
08/07/2021 490/500 697/710 585/600
07/07/2021 490/500 697/710 585/600
06/07/2021 490/500 697/710 585/600
05/07/2021 490/500 700/714 585/600

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
7/22/2021 US DOLLAR 409.14 409.64 410.14
7/22/2021 POUNDS STERLING 563.1812 563.8695 564.5577
7/22/2021 EURO 481.8851 482.474 483.0629
7/22/2021 SWISS FRANC 444.7657 445.3093 445.8528
7/22/2021 YEN 3.7114 3.7159 3.7204
7/22/2021 CFA 0.7151 0.7251 0.7351
7/22/2021 WAUA 580.1991 580.9082 581.6172
7/22/2021 YUAN/RENMINBI 63.2522 63.3299 63.4077
7/22/2021 RIYAL 109.0778 109.2111 109.3444
7/22/2021 DANISH KRONA 64.7732 64.8524 64.9315

N.B: These tables are updated three times a day.

 

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Naira

Naira Exchange Rates Today, Friday, July 23, 2021

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Naira Notes - Investors King

The Naira improves slightly against its global counterparts at the parallel market on Friday as liquidity increase marginally across key forex markets. The Naira gained N2 against the United States Dollar from N506 it traded last week Friday to N504 today, Friday, July 23, 2021 at the parallel market. Against the Euro and British Pound, the local currency exchanged at N595 and N705, respectively.

Economic uncertainty amid unclear policy direction has put a lid on Naira against global currencies, especially with Nigeria’s fiscal buffer lacking despite crude oil trading at an almost 2-year high from COVID-19 record-low. The drop in foreign reserves impeded the Central Bank of Nigeria’s ability to consistently intervene at the forex to prop the Naira value as usual.

At the bureau de change section, the Naira exchanged at N500, N705 and N595 to the United States Dollar, British Pound and the Euro, respectively. See the table below for Naira rates.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
23/07/2021 500/504 698/705 588/595 62/69 407/415 300/320
22/07/2021 498/503 695/703 585/590 62/69 407/415 300/320
19/07/2021 495/503 698/705 585/592 62/69 407/415 300/320
16/07/2021 502/506 700/708 590/596 62/69 407/415 300/315
15/07/2021 500/505 700/708 590/596 62/69 407/415 300/320
14/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
13/07/2021 500/505 702/708 590/595 62/68 407/415 300/320
12/07/2021 500/505 700/708 590/595 62/69 407/415 300/320
09/07/2021 500/505 700/708 588/593 62/69 407/417 300/320
08/07/2021 499/503 700/708 588/593 62/69 407/417 300/325
07/07/2021 499/503 700/710 588/593 62/69 407/417 300/325
06/07/2021 499/503 698/710 590/595 62/69 407/417 300/325

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
23/07/2021 490/500 694/705 580/595
22/07/2021 490/500 690/705 580/595
19/07/2021 490/500 690/707 580/595
16/07/2021 490/500 700/710 585/600
15/07/2021 490/500 698/710 585/600
14/07/2021 490/500 698/710 590/595
13/07/2021 490/500 697/710 585/600
12/07/2021 490/500 698/710 585/600
09/07/2021 490/500 698/710 585/600
08/07/2021 490/500 697/710 585/600
07/07/2021 490/500 697/710 585/600
06/07/2021 490/500 697/710 585/600
05/07/2021 490/500 700/714 585/600

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
7/22/2021 US DOLLAR 409.14 409.64 410.14
7/22/2021 POUNDS STERLING 563.1812 563.8695 564.5577
7/22/2021 EURO 481.8851 482.474 483.0629
7/22/2021 SWISS FRANC 444.7657 445.3093 445.8528
7/22/2021 YEN 3.7114 3.7159 3.7204
7/22/2021 CFA 0.7151 0.7251 0.7351
7/22/2021 WAUA 580.1991 580.9082 581.6172
7/22/2021 YUAN/RENMINBI 63.2522 63.3299 63.4077
7/22/2021 RIYAL 109.0778 109.2111 109.3444
7/22/2021 DANISH KRONA 64.7732 64.8524 64.9315

N.B: These tables are updated three times a day.

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