No ministers but marked activity in the presidency
The boost to all Nigerian financial asset prices from the election outcome proved short-lived. Global headwinds and the impatience of some investors with the new president have brought about a market reversal. Buhari has not yet appointed his ministers but has made some important steps on security and governance. The new order’s true full colours should emerge in the 2016 budget process.
No rescue from the oil price before 2017
The FGN does not expect to be rescued by a strong pick-up in the oil price. Oversupply in the market, China worries and the Iran deal militate against a recovery before 2017. We see an average spot price for Bonny Light of US$60/b this year.
That third devaluation coming shortly
The CBN/MPC favour a managed rate, and may well introduce more administrative measures for this purpose. We think however that a rate hike in the US and a reopening of the parallel market gap will force their hand, and put the rate at N215 at year-end.
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