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RBA Leaves Rate Unchanged at 1.5%

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The Reserve Bank Of Australia
  • RBA Leaves Rate Unchanged at 1.5%

The Reserve Bank of Australia left cash rate unchanged at 1.50 percent on Tuesday.

The global economic expansion is continuing. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth in China has slowed a little, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector. Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets. One ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.

Financial conditions remain expansionary, although they are gradually becoming less so in some countries. There has been a broad-based appreciation of the US dollar this year. In Australia, money-market interest rates are higher than they were at the start of the year, although they have declined somewhat since the end of June. These higher money-market rates have not fed through into higher interest rates on retail deposits. Some lenders have increased mortgage rates by small amounts, although the average mortgage rate paid is lower than a year ago.

The Bank’s central forecast is for growth of the Australian economy to average a bit above 3 per cent in 2018 and 2019. In the first half of 2018, the economy is estimated to have grown at an above-trend rate. Business conditions are positive and non-mining business investment is expected to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector.

Australia’s terms of trade have increased over the past couple of years due to rises in some commodity prices. While the terms of trade are expected to decline over time, they are likely to stay at a relatively high level. The Australian dollar remains within the range that it has been in over the past two years on a trade-weighted basis, but it has depreciated against the US dollar along with most other currencies.

The outlook for the labour market remains positive. The unemployment rate has fallen to 5.3 per cent, the lowest level in almost six years. The vacancy rate is high and there are reports of skills shortages in some areas. A further gradual decline in the unemployment rate is expected over the next couple of years to around 5 per cent. Wages growth remains low, although it has picked up a little recently. The improvement in the economy should see some further lift in wages growth over time, although this is likely to be a gradual process.

Inflation is around 2 per cent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently. In the interim, once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower, at 1¾ per cent.

Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA’s earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality.

The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

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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Naira

Dollar to Naira Today January 24, 2022

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Naira Exchange Rates - Investors King

Here is the daily dollar to Naira exchange rates at both the official and black markets today, January 24, 2022.

Read and follow Investors King daily update on the official exchange rate for the dollar as well as Black Market rates, Bureau de Change (BDC) rates and CBN rates.

How Much is Dollar to Naira Exchange Rate Today, January 24, 2022, at the Official Market?

The official exchange rate for $1 dollar to naira = ₦415.64/$1, according to the Central Bank of Nigeria official exchange rates.

However, FMDQ Group forex data puts the dollar to naira exchange rate at ₦416 to $1 on Friday, 21st January 2022. The Investors and Exporters forex platform is yet to be updated today.

How Much is Black Market Exchange Rate for Dollar to Naira Today?

The dollar to naira exchange rate at the unregulated forex market popularly known as the black market is N560 for buyers and sells at N565 today, Monday, January 24, 2022, according to sources cited by Bureau De Change (BDC).

The Central Bank of Nigeria has warned against patronising the black market and directed all Nigerians to visit their banks for their forex needs.

How Much is Bitcoin to Naira Today?

Bitcoin to Naira exchange rate dipped by 0.25 percent in the last 24 hours to N14.630 million while Ethereum [ETH] to Naira stood at N979,245, representing a decline of 3.40 percent.

The entire cryptocurrency plunged in December 2021 after the US Federal Reserve announced plans to adjust its monetary policy to accommodate the change in the nation’s economic realities. Experts are predicting that an increase in interest rate will impact the crypto space as capital inflow is projected to drop.

Meanwhile, the minister of finance Mrs Zainab Ahmed on Monday said the federal government has suspended plans to remove fuel subsidy in 2022 given the nation’s inflation rate.

Speaking at National Assembly, she said  “We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry,” Ahmed said at the meeting.

“Mr. President does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures.

“One of these include the roll-out of the refining capacities of the existing refineries and the new ones which would reduce the amount of products that would be imported into the country.”

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Naira

Naira Slides Marginally Against US Dollar, Exchanges at N415

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Naira Exchange Rates - Investors King

The Nigerian Naira fell slightly against the United States Dollar on Monday, according to the last update from the Central Bank of Nigeria.

The local currency was exchanged at N414.89 per dollar on Friday before depreciating by N0.11 or 0.03 percent to N415 on Monday.

It should be recalled that the Naira plunged to N435 against the United States on Friday 31, December 2021 when the Central Bank of Nigeria (CBN) adjusted its exchange rate by N2 to accommodate the change in Nigeria’s economic realities.

The Naira has now improved by about 4.6 percent against the United States Dollar from the year to date. The improvement was after the market digested and interpreted the CBN action as the usual forex devaluation in line with the apex bank policy.

At the unregulated black market, traders in Abuja sold the greenback at N570 a unit and buy it at N569. CBN had attributed Nigeria’s forex challenges to the activities of black market operators and warned Nigerians to stop patronising that section of forex.

Meanwhile, the crypto space remained bearish across the board ahead of US Federal Reserve rate decisions. Bitcoin to Naira exchange rate declined by 2.5 percent to N17.346 million in the last 24 hours while Eth shed 3.6 percent.

Other cryptocurrencies suffer the same fate as Binance coin, Tether, Cardano and XRP depreciated by 3.70 percent, 0.31 percent, 1.72 percent and 2.93 percent.

Bitcoin looks vulnerable above the $41,000 support level, largely due to the drop in capital inflow into the crypto space ahead of a possible interest rate increase in the world’s largest economy, the United States.

Bitcoin continues to look vulnerable having failed to bounce back strongly off the recent lows. It appeared to be gathering some upside momentum at times last week but it quickly ran into resistance just shy of $45,000 where it had previously seen support. All eyes are now on $40,000 and whether we’re going to see another run at that major support level,” said Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA, in an email to Investors King.

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Naira

Naira Gains 1.58 Percent to N416 at Official FX Market, Bitcoin, Other Cryptocurrencies Plunge

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira gained 1.58 percent or N7.56 against the United States Dollar at the official forex market on Wednesday.

The local currency opened the day at N423.56 to a US Dollar before improving in value to N416 against the greenback. At the official forex window managed by the FMDQ Group, investors traded $114.95 million on Wednesday.

The improvement in Naira value was after the market had digested the Central Bank of Nigeria’s currency adjustment. The central bank had adjusted the Naira to Dollar exchange rate by N2 from N411 to N413 on Friday, leading to devaluation outcry across Africa’s largest economy.

On Friday, the Naira plunged to as low as N435 against the United States Dollar at the official forex trading market and N575 at the unregulated parallel market, popularly known as the black market, before moderating to N416.

Meanwhile, bitcoin and other cryptocurrencies plunged across the board. Bitcoin depreciated by 7.16 percent to $43,058 per coin in the last 24 hours. The decline does not stop there as the second most capitalised digital asset, Eth dipped by 9.77 percent to $3,441.

Solana, Ripple (XRP), Luna and Cardano (ADA) lost 11.48 percent, 8.13 percent, 9.5 percent and 8.6 percent, respectively.

The decline was after the US Federal Reserve minutes of December 14 – 15 meeting released on Wednesday revealed that policymakers are planning to raise interest rates as early as March 2022 to curb escalating inflation rate. Generally, hawkish monetary policy is negative for cryptocurrency as it drags on capital inflow into the space and encourages investors to look into more stable assets for higher interest rates.

According to The Wall Street Journal, the “Federal Reserve officials at their meeting last month eyed a faster timetable for raising interest rates this year, potentially as soon as in March, amid greater discomfort with high inflation.

“Minutes of their Dec. 14-15 meeting, released Wednesday, showed officials believed that rising inflation and a very tight labor market could call for lifting short-term rates “sooner or at a faster pace than participants had earlier anticipated.”

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