Managing Director Financial Derivatives Company Limited, Bismarck Rewane has predicted that the nation equity market will continue in a negative trend as yield on equities become unattractive.
Rewane who made this statement in the recent publication on Post Monetary Policy Committee (MPC) meeting also said that as the Central Bank of Nigeria continues to mop up excess liquidity in the system Treasury Bills and interbank rates would continue to maintain upward trend.
Making projection on the growth of economy in the second quarter of this year, he said external reserve will bleed marginally to $33 billion in April, foreign exchange at the parallel market will trade at flat rate of N475 to a dollar and N485 to a dollar.
He stated that the first quarter of 2021 Gross Domestic Product (GDP) which expected to be released on May 24 could slip back into negative territory of -0.15 per cent while inflation for March projected to stand at 17.8 per cent.
He pointed out that in Sub Sahara Africa, three countries-Nigeria, Angola and Zambia have inflation rate above interest rates.
Meanwhile, the MPC attributed the rising inflation to output and supply shocks.
The CBN’s view that increase in output will help moderate inflation in the short run is widely optimistic because of the time lag in the shift of aggregate supply curve.
Rewane however said that the Central Bank of Nigeria has succefully maintain banking system stability, adding that in terms of protecting the value of the naira and managing external reserve, the apex bank has recorded partial success and fairly successful.
He stated that in the area of maintaining price stability still have a question mark.
