E-Financial
Will the Central Bank of Nigeria Cut Interest Rates in November?
By Lukman Otunuga, senior research analyst at FXTM,
Rising inflationary pressures in Nigeria will certainly complicate the Central Bank of Nigeria’s efforts to cut interest rates to stimulate growth.
The nation’s annual inflation edged up to 11.24% in September 2019, its highest level in three months after falling to a three-and-a-half-year low of 11.02% in August. Given how the CBN governor has already made it clear that inflation must hit single digits before a rate cut could be considered, it remains uncertain whether the central bank will cut interest rates before year end.
A rate cut could inject the Nigerian economy with a welcome boost, as it stimulates consumption which accounts for roughly 80% of GDP. But However, cutting the MPR when the inflation rate is at 11.22 percent risks further overheating prices. Like other economies, Nigeria may be exposed to the impacts of a global slowdown but its economy is very different from the US’ which is currently experiencing anemic price inflation. This may be why the Central Bank of Nigeria decided to prioritize reducing inflation to single digits and said it is in no hurry to reduce its key rate.
In the absence of cutting interest rates, the CBN has raised the country’s loan to deposit ratio for banks to 65% from 60%. Making sure money is in circulation instead of being tied up in government bonds sounds like a logical way to keep the economy on the road to recovery. However, it remains to be seen whether this will be enough to promote growth.
Trade hopes lift risk mood; Brexit drama continues
There is a mood of optimism and hope across financial markets on Tuesday morning thanks to upbeat comments from President Donald Trump regarding the progress of trade talks with China.
Given how the President said China has signaled that negotiations over the initial trade deal are moving in the right direction, expectations remain elevated over both sides signing an agreement at a meeting in Chile next week. This positive sentiment is supporting Asian stocks during early trading and is likely to trickle down to European markets later this morning. While the encouraging mood across financial markets will remain stimulated by trade optimism, risk aversion could still make an abrupt return should talks drag on or turn sour.
Pound volatility expected as Brexit drama continues
The past few days have been volatile for the British Pound due to ongoing uncertainty and constant drama revolving around Brexit.
Sterling seems to be catching its breath early this morning as MP’s prepare to vote on Boris Johnson’s Withdrawal Agreement Bill later this afternoon. If the deal hits a brick wall, the ball then gets hurled back to Brussels as we await confirmation of the Government’s Brexit extension request. Should MPs back the Prime Ministers deal, a programme of motion will take place shortly after, followed by a debate on amendments of the bill on Wednesday. Regardless of what happens today, the British Pound is set to remain volatile.
With regards to the technical picture, GBPUSD has broken above the bearish channel on the weekly timeframe. A solid daily close above 1.30 should inspire a move towards 1.3160 in the medium term. Should 1.30 prove to be a stubborn resistance level, I see Sterling declining back towards the 1.2700 support.
Dollar Index poised for further declines?
There has not been much action in the Dollar Index (DXY) since the start of the week with prices trading around 97.76 as of writing.
The heavy selloff witnessed last week has placed bears in a position of power. The DXY is under pressure on the daily charts with prices trading under the 200 Simple Moving Average. Sustained weakness below the 97.50 level should encourage a decline back towards 97.00 in the short to medium term.
Commodity spotlight – Gold
Gold is likely to remain on standby in the absence of a fresh directional catalyst.
The precious metal is waiting for the next big theme or market-moving event that will influence global sentiment and risk appetite. Until something fresh is brought into the picture, Gold is positioned to trade within a modest range in the short to medium term.
Looking at the technicals, all eyes will remain on the psychological $1500 level. Sustained weakness below this point should inspire a decline towards $1470. Alternatively, a solid breakout above $1500 will most likely open the doors towards $1515 and $1525, respectively.
E-Financial
SEC Introduces eFiling System to Reduce Listing Time
Securities and Exchange Commission (SEC), has said that it has introduced various initiatives to reduce time to market with the aim of improving the efficiency and attractiveness of the Nigerian capital market, promote economic growth and development.
Dr. Emomotimi Agama, director general, SEC, who stated this, said these initiatives include streamlined registration processes, introduction of an electronic filing system and enhanced regulatory frameworks among others.
Agama emphasized that shorter time to market can benefit capital market development in several ways like increased liquidity which will lead to faster listing allowing companies to access capital more quickly, increased liquidity in the market and enable companies to allocate resources more efficiently, thereby driving economic growth.
He stated: “Shorter time to market will also improve investor confidence because when the listing processes are efficient, it can enhance investor trust and confidence in the market. A shorter time to market can make a jurisdiction more attractive to companies and investors, promoting competition and growth’’.
Explaining further, he said, “The Commission has been actively digitizing its operations, including the submission and processing of applications for securities registration, to reduce delays caused by manual processes. This involved the use of electronic platforms for document submissions and approvals, which not only speeds up the process but also improves transparency.
“We have undertaken regulatory reforms aimed at simplifying and streamlining the approval processes. These reforms include updating rules and regulations to reflect current market realities and adopting international best practices that enhance efficiency. For instance, the Commission introduced checklist review for registration of fixed income securities, thereby shortening the review and approval timelines. The Commission launched and conducted a targeted bi-annual training for Issuing Houses to enhance time to market and fast-track review of applications”.
E-Financial
SiBAN Commends SEC for Granting Approval to Digital Asset Exchange Operators
The Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) commends the Securities and Exchange Commission (SEC) of Nigeria for its recent granting of “Approval-in-Principle” to two digital asset exchanges under the Accelerated Regulatory Incubation Program (ARIP) and the admission of five firms into the Regulatory Incubation (RI) Program.
This progressive move will help Nigeria position itself as a leader in the digital asset space in Africa, providing a clearer and more robust regulatory framework that balances innovation with investor protection.
Designed by the SEC is to facilitate the onboarding of Entities that proposed to carry on virtual asset activities and whose applications have been filed with the Commission, the ARIP allows these platforms to continue operations while adhering to evolving regulatory requirements. By providing a regulatory “sandbox,” the SEC allows innovative digital products to be tested under supervision, ensuring both consumer safety and market integrity.
Toritseju Kaka, Chairman of SiBAN Caretaker Committee, reacting to the development, stated, “This initiative is a testament to the SEC’s forward-thinking approach to regulation. By creating a structured path for compliance, the SEC is not only protecting investors but also fostering a healthy and innovative digital economy.”
SiBAN strongly believes these steps will enhance trust in the digital asset ecosystem, drive foreign and local investments, and stimulate economic growth. As the digital asset market in Nigeria continues to grow, these initiatives provide much-needed clarity and assurance to all market participants, from new entrants to established firms.
We understand, from the SEC’s press release of August 29 2024, that apart from the entities that received Approvals-in-Principle, other applications received by the SEC are undergoing assessment and would be granted Approval-in-Principle on a case-by-case basis as they meet all SEC requirements.
For improved transparency, and consistent with global best practices, the SEC may consider stating the number of applications it received in the current cohort and also indicate when the next cohort will be opened for applications.
Meanwhile, SiBAN calls on all stakeholders in the industry, local and foreign, to embrace these regulatory frameworks and actively engage with the SEC to ensure full compliance and support for this new era of innovation. We encourage firms to leverage these programs to bring forward new ideas that can transform the financial landscape of Nigeria.
E-Financial
Polaris Bank, NCF take tree planting initiative to Kano
Polaris Bank has taken its tree planting initiative aimed at nationwide land restoration to Kano State working in partnership with the Nigeria Conservation Foundation (NCF).
![](https://www.nigeriacommunicationsweek.com.ng/wp-content/uploads/2024/07/Polaris-251x300.jpeg)
Polaris Bank ED, Chris Ofikulu, & TASUED Dep VC, Prof. Adekunle Adeogun receiving the 3 tree species from the NCF Project Officer in Ijagun, Ijebu Ode, Ogun State on Monday.
The commemorative tree planting activity was held at Ajingi Community Reserve, Kunkurawa, Kano on Friday, August 30, 2024.
Recall that the Bank’s tree planting scheme commenced commemorating World Environment Day in June. The 2024 theme focuses on “Land Restoration, Desertification, and Drought Resilience.” The initiative took off at the Tai Solarin University of Education (TASUED), Ijagun, Ijebu Ode, Ogun State.
In his goodwill message, Mahmud Kawu, Polaris Bank’s Divisional Head, North, representing the MD/CEO, expressed the Bank’s unwavering commitment to the tree-planting initiative, highlighting how deeply it aligns with their values and dedication to a greener future.
“At Polaris Bank, sustainability is more than a catchphrase; it’s the core of who we are. We are on a dedicated journey to uphold this ethos with conviction. Our commitment to sustainability is reflected in every aspect of our operations, from promoting responsible banking and empowering communities to tackling environmental challenges and driving economic growth.
We ensure that every decision we make, from investments to day-to-day operations, is rooted in strong Environmental, Social, and Governance principles (ESG)”.
Kawu explained that the partnership between the Bank and the NCF is borne out of its conviction to the Foundation’s dedication to encouraging sustainable economic growth and appreciating the importance of environmental preservation. He also encouraged residents to be key to the scheme to bring about sustainable environmental preservation.
“Today’s tree planting Initiative at Ajingi Community Reserve, Kunkurawa in collaboration with the Nigerian Conservation Foundation (NCF) is a testament to our commitment to environmental sustainability. The NCF, a renowned non-governmental organization dedicated to sustainable development and nature conservation in Nigeria. Polaris Bank shares its dedication to encouraging sustainable economic growth and appreciating the importance of environmental preservation.
This project aligns perfectly with the theme of the World Environment Day and in addition to reducing carbon footprints and enhancing our natural ecosystem, it aims to raise public awareness about the importance of environmental preservation.”
Kawu highlighted the benefits of the Bank’s tree-planting initiative to include the restoration of degraded areas, prevention of soil erosion amongst others.
“The benefits of our tree-planting initiative cannot be overemphasized. It contributes significantly to the restoration of degraded areas, the prevention of soil erosion, and the enhancement of the bio-diversity of the area. Additionally, by absorbing CO2 and helping to regulate the climate, trees play a crucial role in reducing overall carbon footprints.
“In conclusion, the tree-planting project is a testament to Polaris Bank’s dedication to environmental stewardship and community well-being, promoting a greener future through corporate responsibility,” he noted.
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