Nigeria’s Apex bank held the first meeting of its reconstituted Monetary Policy Committee (MPC) for the year 2018. Following a detailed review of domestic macroeconomic events, the MPC deemed it fit to retain all rates: MPR at 14% (which has remained at a record high of 14 percent since July 2016), CRR 22.5%, Liquidity Ratio 30% and Asymmetric corridor at +200 and -500 basis points around the MPR1. The unchanged monetary policy can be attributed to the MPC’s satisfaction with the continued moderation in economic indices as well as the gradual return to macroeconomic stability. Going forward, fiscal policy authorities should consolidate these positive outcomes given monetary policy inaction.
Macroeconomic Report & Economic Updates
Available reports from the Nigerian National Petroleum Corporation(NNPC), suggests a significant reduction in the cost incurred to produce one barrel of crude oil for the past two years. Specifically, the cost of production reduced by 71 percent from $78 as at August 2015, to $23 per barrel as at August 2017. This may be attributable to moderations in operational expenditures, following repairs and restructuring in the oil region.
Real GDP Growth Rate- Nigeria and selected African Economies: While GDP growth in selected African economies have generally declined at different magnitudes with the slump in commodity prices, other e
This study examines the hedging effectiveness of portfolio investment diversification between developed and developing economies; with focus on the Nigerian stock asset vis--vis the stock assets of the United States (US) and United Kingdom (UK). Its main contribution is in the analysis of optimal portfolio diversification using optimal portfolio weight (OPW) and optimal hedging ratio (OHR). Empirical findings show that the OPW and OHR are low, which indicates impressive potential gains from combining Nigerian stock assets in an investment portfolio with US and UK stock assets. In addition, exchange rate volatility is found to pose stern limitation on the potential benefits of this portfolio diversification arrangement. It is therefore recommended that the monetary authority in Nigeria should pursue policies towards reducing exchange rate volatility to the barest minimum. This will possibly attract more investors from developed economies who might be willing to combine Nigerian stock in their investment portfolio to minimize portfolio risk.