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Wednesday, 27 November 2019

Rising from its Monetary Policy Committee (MPC) session this afternoon, the Central Bank of Nigeria (CBN) announced its retention of the Monetary Policy Rate (MPR) at 13.5%. The MPR, which measures benchmark lending rate, was retained alongside the Cash Reserve Ratio (at 22.5%), liquidity ratio (at 30%), and asymmetric corridor (at +200 and -500 basis points).

According to Godwin Emefiele, the apex bank’s chief, these resolutions were unanimously made by the 11-member committee that presided over the meeting.

While the Cash Reserve Ratio is a metric for deciding the minimum portion of the total deposits of customers, held by commercial banks as reserves (cash or deposits) with the Central Bank, liquidity ratio is a financial standard for gauging a bank’s ability to pay off its short term debt obligations. The asymmetric corridor aims at increasing the flexibility of monetary policy, by providing the ability to make timely reactions to external finance or risk sentiment shocks by means of effective management of daily open market operations.

Mr Emefiele admitted that the upward movement in inflation was expected, while addressing journalists after the meeting. He went further to say that the committee’s decision was taken as a measure to protect prices.

Published in Bank & Finance

Local media on Tuesday reported that Sri Lanka’s government pledged to address major challenges in the country to attract foreign direct investments.

Prasanna Ranatunga, the newly appointed Minister of Industrial Export, Investment Promotion, Tourism and Civil Aviation disclosed this while briefing Journalists on commencement of duty.

Ranatunga said he was confident of reviving all sectors under his portfolio, which suffered in the aftermath of the April 21 terrorist attacks on churches and hotels.

“The tourism industry had the biggest drawback post-Easter Sunday terror attack and we haven’t still been able to recover properly.

“The foreign investors also lost confidence in the economy and our FDIs hit a major stumbling block.

“However, soon after the 30-year-old civil war, we turned around the tourism and investment sectors and we are confident of reviving it once again.’’

Ranatunga is one of 15 ministers who have been appointed to a pared-down interim cabinet ahead of a parliamentary election which is expected to take place next year.

Ranatunga is a member of the Sri Lanka Podujana Permuna whose candidate Gotabaya Rajapaksa won the presidential elections on Nov. 16.

Published in Business

History is being made in Trinidad, Colorado, as the world’s first marijuana mall is scheduled to open this upcoming April.

Developers Chris Elkins and Sean Sheridan deemed Trinidad as the perfect location to build their dream project given Trinidad’s views on law and tourism.

In an interview with local news station KRDO, Elkins said, “This town has a zero-foot setback, which allows us to put five dispensaries here right next to one another. As far as we know, we are the only town in Colorado that can do this.”

Elkins and Sheridan have received city permits and have already purchased a building in downtown Trinidad on Commercial Street. Their next step is waiting for City Council to give their approval.

According to Elkins, four of the five spaces have already been leased to marijuana-based businesses, and if the City Council gives their approval, they are hoping to open their doors to the public in April.

Along with their passion for marijuana, Elkins and Sheridan are also incorporating their entrepreneurial skills into this project, and they are excited about the benefits the mini-mall will bring to the town.

Elkins expects the mini-mall to boost the local economy, and it seems as though many local residents agree.

Mechelle Duran, a Trinidad local who lives nearby the mini-mall location, said, “I’m excited to see it open. We have a lot of pot stores already and there is a lot of benefits.”

 There are other locals who have expressed their concern with the mini-mall attracting homeless people and transients.

Tamara Johnson, a Trinidad local, said, “To be honest, I don’t have any problems with marijuana or marijuana users but I do know we have had a lot more problems with theft. I know Walmart is having problems. And transients, that’s becoming a huge problem.”

Regardless of the differing opinions of Trinidad locals, Elkins and Sheridan remain optimistic and anxiously await the grand opening of the world’s first marijuana mini-mall.

Published in Business

Shedding its value in Quarter 3 in response to its perennially strong import culture, which far outpaces its exports, is high, a financial pundit has observed. In the second quarter, Nigeria posted a current account deficit in the sum of $2.9 billion and there are worries among industry experts that the development could recur in Q3, with the implication that government might be compelled to modify the exchange rate lower to suit the sentiments of foreign investors.

Lukman Otunuga, a research analyst with the financial planner, FXTM, gave the outlook while noting that the Central Bank of Nigeria (CBN) might be similarly strained to offer palliatives to the current inflationary pressures on the economy.

“While a deficit is not necessarily bad, it does suggest that a country’s liabilities exceed its foreign assets. Given how Nigeria imports more than it exports, there is a risk of the nation experiencing another deficit in Q3 – an outcome that could prompt foreign investors to call for Naira devaluation.”

“There will be a strong focus on the interest rate decision on Tuesday (today). Given how inflationary pressures are making an unwelcome return, the CBN may think twice before cutting interest rates from 13.5 per cent. Should the CBN governor adopt a cautious tone and express concerns over the Nigerian economy, investors may re-evaluate the possibility of monetary policy easing during the first half of 2020,” Mr Otunuga noted.

Nigeria’s Capital importation figure for Q3 2019, released earlier this week, put the value of capital importation into the country during the period at $5.368 million, representing a 7.78% plunge from the amount posted at Q2. However, it was an 87.99% increase over the amount posted in the corresponding period of 2018. Generally, the contraction in the size of Nigeria’s capital importation on quarter on quarter basis as detailed above is a timely indication that the nation is increasingly losing its appeal as investment hub among foreign investors.

Published in News Economy
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