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Anticipated US Fed rate cut drives up Brent futures 

Brent gained 0.84% to trade at $81.23pb on Thursday after recording losses in the previous trading session. This was due to a surprises build in U.S. crude inventories as it ramped up output following chilly weather. The pick-up in the price of Brent was also driven by signals of a possible rate cut by the Federal Reserve and China’s support measure to stem the fallout from the liquidation of Evergrande.

CBN gives banks instructions on net open position limit, removes IMTO restrictions

Following the 4.25% depreciation in the naira between January 29 and 31, the CBN has issued two complementary circulars to commercial banks and IMTOs to address price discovery and market distorting restrictions. The first circular instructed banks to limit their net open position to 20% of shareholders’ funds unimpaired by losses using the gross aggregate method to hedge forex losses while softening forex demand. Meanwhile, the circular to IMTOs instructed Deposit Money Banks to ensure that international transactions now occur at the prevailing market rate. Unfortunately, the domestic commodities market is beginning to respond to the sharp naira devaluation, as major staples have witnessed a sharp increase in prices. More importantly, the MPC will be meeting on February 26, and we expect a transparent and hawkish stance by CBN committed to boost investors’ confidence and achieve price stability.

These and other burning economic issues were discussed on Channels TV Business Morning Programme by FDC Senior associate, Dumebi Oluwole.

Click the link to watch the video.