Forex

ECB Looks Down Stimulus Exit Path as Politics Threaten Economy

Published

6 years ago

April 13, 2018

ECB Looks Down Stimulus Exit Path as Politics Threaten Economy

The European Central Bank is finding out just how tricky its policy path could be in a year when political spats are overshadowing the economy.

The account of the March 7-8 Governing Council meeting listed concerns including that U.S. import tariffs — announced just before the gathering — would hurt “all countries involved.” It also pointed to potentially unforeseen consequences of Britain’s withdrawal from the European Union and economic slack that might be greater than previously thought.

Policy makers were still confident enough to remove their pledge to ramp up asset purchases should the outlook deteriorate. At least one official suggested the euro area might be close to the self-sustained growth and inflation needed to halt that scheme.

Five weeks on, the data have weakened and the direction of the trade dispute between the U.S. and China, the world’s two biggest economies, is more unclear than ever.

“The ECB may look at a longer wind-down of the program,” said Nick Kounis, an economist at ABN Amro Bank NV in Amsterdam. “It would be a major surprise if they decided to extend once again, but considering the level of uncertainty right now, a longer exit path could be a logical option.”

The latest blow hit a couple of hours before the account was published, with a report that euro-zone industrial production unexpectedly shrank for a third month. Multiple measures this year have missed economists’ estimates, suggesting last year’s 2.3 percent expansion may have been the peak.

The prime concern is not so much the direct impact of U.S. President Donald Trump’s tariffs on imported steel and aluminum — from which a number of allies are exempt — and proposals for more on as much as $150 billion of Chinese goods. It’s more China’s retaliation and the damage the conflict could do to sentiment, prompting a self-fulfilling economic downturn.

“There was widespread concern that the risk of trade conflicts, which could be expected to have an adverse impact on activity for all countries involved, had increased,” the ECB account showed. “It was also cautioned that negative confidence effects could arise.”

Looming Policy Shift

Policy makers have stressed that they’re not yet worried about the euro-area economy’s domestic strength and that wage and inflation pressures are gradually increasing. Executive Board member Benoit Coeure, speaking in Paris on Thursday, said “the possibility of larger-than-estimated slack does not mean that monetary policy will have to remain unchanged.”

Still, the ECB account showed policy makers see global risks as tilted to the downside, and President Mario Draghi said this week that he’s especially monitoring any signs optimism is fading.

The Governing Council next meets to set policy on Apr. 26, when officials are likely to discuss how and when they might be able to end their bond-buying program, though most economists don’t expect a decision before June. The program is currently due to run until at least September.

Global Concerns

Trade threats are also high on the agenda for the Federal Reserve. The minutes of its March 20-21 policy meeting released Wednesday showed a “strong majority” saw downside risks for the U.S. economy from the prospect of retaliatory actions.

The World Trade Organization warned on Thursday of signs a looming global standoff has started to affect business confidence and investment decisions, possibly jeopardizing growth that is already projected to be lower this year than in 2017. International Monetary Fund Managing Director Christine Lagarde said on Wednesday that the world economy must avoid being sucked into a protectionist spiral.

“For now, the trade-war risk is just that, a risk,” according to Florian Hense, an economist at Berenberg Bank in London. He said that an escalation of the conflict can probably be prevented while momentum in the euro area could pick up in the coming months.

“The medium-term outlook has not changed in such a way that we would expect the ECB to adjust its policy,” he said. “We expect the ECB to let asset purchases run out at the end of this year before hiking the refi rate for the first time in June 2019.”

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Published

2 days ago

May 17, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight improvement in the Naira exchange rate when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

Buying Rate: ₦1,540
Selling Rate: ₦1,530

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

Forex

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

Published

2 days ago

May 17, 2024

Samed Olukoya

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Published

4 days ago

May 16, 2024

Samed Olukoya

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 2024.

This indicates a decline in the Naira exchange rate compared to the current rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.