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Yellen Says Interest Rate Hike Could Come ‘Relatively Soon’

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Janet Yellen
  • Yellen Says Interest Rate Hike Could Come ‘Relatively Soon’

Federal Reserve Chair Janet Yellen signaled the U.S. central bank is close to lifting interest rates as the economy continues to create jobs at a healthy clip and inflation inches higher.

A rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Yellen said in the text of testimony she is scheduled to deliver Thursday in Washington before Congress’s Joint Economic Committee.

Yellen, who made no mention of the prospective policies of the incoming administration of President-elect Donald Trump, reiterated the expectation of Fed officials that future rate increases will be “gradual.” Bond prices have fallen and stocks have risen as investors anticipate that Trump’s proposals to cut taxes and boost infrastructure and defense spending will lead to faster inflation and stronger growth.

“Yellen’s testimony ignored the very real possibility of substantial fiscal stimulus next year,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., said in a note. She “does not want the Fed to become even more of a political punch bag than it is already.”

Yellen’s remarks will serve to cement expectations, barring a significant negative shock, for an increase in interest rates when the Federal Open Market Committee gathers in Washington Dec. 13-14. Pricing in federal funds futures contracts already imply a greater than 95 percent chance of a quarter-point hike.

Risks of Delay

The Fed chair warned of the risks attached to waiting too long before raising rates.

“Were the FOMC to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the committee’s longer-run policy goals,” she said. “Moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and ultimately undermine financial stability.”

She suggested the danger of that happening soon was low because current policy is only “moderately accommodative.”

“The risk of falling behind the curve in the near future appears limited,” she said.

At their most recent meeting earlier this month, Fed officials left the target range for the benchmark federal funds rate at 0.25 percent to 0.5 percent — where it’s been since December — and said the case for raising rates had “continued to strengthen.”

Done Deal

“A rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist. “But the pace of firming is likely to continue to be glacial because the funds rate will then be within about a percentage point of the FOMC’s estimate of neutral,” he said, referring to the level of rates that neither spurs nor slows the economy.

Yellen said the decision not to raise rates earlier this month didn’t reflect a lack of confidence on the economy.

“I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the committee’s 2 percent objective over the next couple of years,” she said. “In addition, global economic growth should firm, supported by accommodative monetary policies abroad.”

While the recent pace of jobs gains “cannot continue indefinitely,” Yellen said she still saw room for further strengthening of the labor market.

At 4.9 percent, the U.S. unemployment rate is still slightly above most Fed officials’ estimate for the lowest sustainable level of joblessness, she said. Involuntary part-time employment, she noted, remains elevated.

Yellen saw some signs that a tightening labor market was beginning to produce higher wage gains. Stepped up pay rises should eventually help boost inflation to the Fed’s goal just as temporary forces holding it down — lower prices for imports and oil — continue to fade, she said.

Yellen is scheduled to answer questions from lawmakers after delivering her prepared testimony at about 10 a.m.

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.

Naira

Daily Naira Exchange Rates; Friday, March 5, 2021

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naira

Naira Exchange Rates; Friday, March 5, 2021

Naira remained pressured across key foreign exchange markets on Friday, March 5, 2021 as scarcity persists. The local currency traded at N480 to a United States Dollar at the parallel market on Friday morning while it exchanged at N675 to a British Pound and N582 to the European common currency.

Daily 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
05/03/2021 475/480 670/675 575/582 60/68 385/395 382/300
04/03/2021 475/480 665/672 574/580 60/68 385/395 382/300
03/03/2021 475/480 662/672 574/580 60/68 385/395 382/300
02/03/2021 475/480 662/672 574/580 60/68 385/395 382/300
01/03/2021 475/482 662/672 575/583 60/68 385/395 382/300
26/02/2021 475/482 660/672 575/583 60/68 385/395 382/300
25/02/2021 475/480 660/670 572/580 60/68 385/395 282/300
24/02/2021 475/480 655/670 570/580 60/68 385/395 282/300
23/02/2021 475/480 655/665 575/582 60/68 385/395 282/300
22/02/2021 475/480 652/660 575/580 60/68 385/395 282/300
19/02/2021 474/478 648/655 570/577 60/68 385/395 282/300
18/02/2021 472/477 645/655 570/575 60/68 385/395 282/300
17/02/2021 472/478 645/655 570/575 60/68 385/395 282/300
16/02/2021 465/473 645/652 565/570 60/68 385/395 282/300
15/02/2021 465/473 642/652 562/570 60/68 385/395 282/300
12/02/2021 465/473 642/650 562/570 60/68 385/395 282/300
11/02/2021 465/475 640/650 560/570 60/70 385/400 280/300
10/02/2021 472/478 645/652 565/575 60/70 385/400 280/300
09/02/2021 474/480 645/655 567/575 60/70 385/400 280/300
08/02/2021 474/480 645/655 567/575 60/70 385/400 280/300
05/02/2021 474/480 645/653 567/578 60/70 385/400 280/300
04/02/2021 474/480 645/653 567/578 60/70 385/400 280/300
03/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
02/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
01/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
29/01/2021 474/480 642/652 575/580 60/70 385/400 280/300

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
05/03/2021 470/480 662/672 570/580
04/03/2021 470/480 662/672 570/580
03/03/2021 470/480 662/670 573/580
02/03/2021 470/480 660/669 573/580
01/03/2021 470/480 660/669 574/580
26/02/2021 470/480 660/669 574/580
25/02/2021 470/480 658/665 574/580
24/02/2021 470/478 654/660 570/578
23/02/2021 470/478 654/660 570/578
22/02/2021 470/477 650/656 570/577
19/02/2021 465/476 645/656 565/573
18/02/2021 465/475 640/652 563/570
17/02/2021 465/477 640/655 562/572
16/02/2021 460/475 640/652 562/570
15/02/2021 460/475 638/652 561/568
12/02/2021 467/475 635/650 562/570
11/02/2021 465/475 640/655 560/575
10/02/2021 472/478 640/655 565/575
09/02/2021 472/478 640/655 565/575
08/02/2021 472/478 640/655 565/575
05/02/2021 472/478 640/650 565/575
04/02/2021 472/478 640/650 565/575
03/02/2021 471/478 640/650 572/580
02/02/2021 471/478 640/655 572/580
01/02/2021 471/478 640/655 572/580
29/01/2021 471/477 640/648 570/579

Central Bank of Nigeria’s Official Naira Rates

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Naira

Naira Hits Record Low of N427 Against the United States Dollar on I&E FX Window

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Nigeria 1000 notes

Naira Exchanges at N427 Against the United States Dollar on I&E FX Window

The Nigerian Naira plunged to as low as N427.45 against the United States Dollar on the Investors and Exporters Foreign Exchange Window on Thursday, March 4, 2021.

The local currency pulled back to N406.50 a US Dollar but opened lower at N412.50 on Friday morning.

Investors traded $66.99 million during the trading hours of Thursday.

At the black market section of the foreign exchange, Naira traded at N480 against the United States Dollar while the British Pound was exchanged at N673.

The Euro common currency remained unchanged at N580, the same rate it exchanged on Monday.

Despite the surge in the oil price to N67 per barrel and a series of forex policies, the Central Bank of Nigeria continues to struggle with low dollar liquidity across the board.

Nigeria’s foreign reserves declined by about $1 billion in one month as Africa’s largest economy struggles with the weak fiscal buffer necessary to mitigate COVID-19 impacts and deepen productivity.

It would be recalled that the Central Bank of Nigeria adjusted its diaspora foreign remittance policy to curb rising foreign exchange rates and put an end to black market transactions hurting the nation’s local currency value.

However, since the new policy was enacted in November 2020, forex scarcity remained pervasive with diaspora remittance inflow expected to decline by $2 billion in 2020.

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Naira

Daily Naira Exchange Rates; Thursday, March 4, 2021

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interbank

Naira Exchange Rates; Thursday, March 4, 2021

Naira exchanged lower against global counterparts on Thursday morning as scarcity persists across forex segments. Naira traded at N480 to United States Dollar on the black market while to a British Pound it sold for N672 as shown below.

Daily 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
04/03/2021 475/480 665/672 574/580 60/68 385/395 382/300
03/03/2021 475/480 662/672 574/580 60/68 385/395 382/300
02/03/2021 475/480 662/672 574/580 60/68 385/395 382/300
01/03/2021 475/482 662/672 575/583 60/68 385/395 382/300
26/02/2021 475/482 660/672 575/583 60/68 385/395 382/300
25/02/2021 475/480 660/670 572/580 60/68 385/395 282/300
24/02/2021 475/480 655/670 570/580 60/68 385/395 282/300
23/02/2021 475/480 655/665 575/582 60/68 385/395 282/300
22/02/2021 475/480 652/660 575/580 60/68 385/395 282/300
19/02/2021 474/478 648/655 570/577 60/68 385/395 282/300
18/02/2021 472/477 645/655 570/575 60/68 385/395 282/300
17/02/2021 472/478 645/655 570/575 60/68 385/395 282/300
16/02/2021 465/473 645/652 565/570 60/68 385/395 282/300
15/02/2021 465/473 642/652 562/570 60/68 385/395 282/300
12/02/2021 465/473 642/650 562/570 60/68 385/395 282/300
11/02/2021 465/475 640/650 560/570 60/70 385/400 280/300
10/02/2021 472/478 645/652 565/575 60/70 385/400 280/300
09/02/2021 474/480 645/655 567/575 60/70 385/400 280/300
08/02/2021 474/480 645/655 567/575 60/70 385/400 280/300
05/02/2021 474/480 645/653 567/578 60/70 385/400 280/300
04/02/2021 474/480 645/653 567/578 60/70 385/400 280/300
03/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
02/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
01/02/2021 474/480 642/655 575/580 60/70 385/400 280/300
29/01/2021 474/480 642/652 575/580 60/70 385/400 280/300

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
04/03/2021 470/480 662/672 570/580
03/03/2021 470/480 662/670 573/580
02/03/2021 470/480 660/669 573/580
01/03/2021 470/480 660/669 574/580
26/02/2021 470/480 660/669 574/580
25/02/2021 470/480 658/665 574/580
24/02/2021 470/478 654/660 570/578
23/02/2021 470/478 654/660 570/578
22/02/2021 470/477 650/656 570/577
19/02/2021 465/476 645/656 565/573
18/02/2021 465/475 640/652 563/570
17/02/2021 465/477 640/655 562/572
16/02/2021 460/475 640/652 562/570
15/02/2021 460/475 638/652 561/568
12/02/2021 467/475 635/650 562/570
11/02/2021 465/475 640/655 560/575
10/02/2021 472/478 640/655 565/575
09/02/2021 472/478 640/655 565/575
08/02/2021 472/478 640/655 565/575
05/02/2021 472/478 640/650 565/575
04/02/2021 472/478 640/650 565/575
03/02/2021 471/478 640/650 572/580
02/02/2021 471/478 640/655 572/580
01/02/2021 471/478 640/655 572/580
29/01/2021 471/477 640/648 570/579

Central Bank of Nigeria’s Official Naira Rates

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