Nigeria's naira remained range-bound on the interbank market. The divergence between interbank and parallel market rates increased substantially last week as central bank decisions led traders to recalibrate their outlook regarding a devaluation.
While we remain of the view that a naira adjustment will only transpire by Q2, we concede that the risks to a shorter timeline are high amid a deepening oil price rout and flight to safe-haven assets. Given our concern that the current monetary policy stance is not aligned with a revision of the exchange rate peg, we anticipate systematic reduction of excess system liquidity and a normalisation of overnight rates prior to an orderly peg adjustment.
Monday, 18 January 2016
Nigeria's Cbank to mop-up liquidity ahead of fx devaluation -NKC
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