Naira Drops As US Begins Monetary Tightening !!!

Emerging market currencies have been hit hard, with the Indian rupee, Indonesian rupiah and Thai baht among others at multi-year lows. Indonesia's central bank board will meet on Thursday in a surprise move amid widespread speculation it will have to raise interest rates again to defend the fast-falling rupiah, now its lowest since April 2009, and its implied volatility at its highest. The Indian rupee hit a record low on Tuesday and posted its biggest single-day fall in nearly 18 years after the lower house of Parliament approved a nearly $20 billion plan to provide cheap grain to the poor, raising concerns the fiscal deficit will blow out even further. The Thai baht was at 32.15 per, its weakest level in three years. The heightened geopolitical risk in the Middle East drove the prices of gold and oil higher, however. Brent crude prices advanced 0.7 percent to a six-month high of $115.44 a barrel, extending Tuesday's 3.3 percent surge - their biggest one-day percentage gain in nearly 10 months. It is now 162 naira to the Dollar officially as of close of business yesterday. I hope this Oil windfall will shield us from the Storm of the tapering of the US Federal Reserve and the introduction of Larry Summers as the new Fed Chairman- he is said to be interested in raising rates Volker style. Advice to start your Christmas shopping very early!!

Any further fall will allow Angola to assume Nigeria's position as the continent's largest crude producer, the report stated. "Output has been less than two million barrels a day for several months," said Rolake Akinkugbe, Head of Energy Research, Ecobank. "It's a reflection of the headwinds facing oil companies in Nigeria," she added. The country's production difficulties have helped push global crude prices above $110 a barrel. They have also damaged the financial outlook in Africa's second-biggest economy, where oil and gas account for nearly 80 per cent of fiscal revenues. The country had budgeted for oil sales of 2.5 million bpd in 2013, which, combined with the high petroleum prices, should have allowed for substantial savings in the Excess Crude Account, the government's rainy-day fund. But instead of increasing, the fund has been run down from $9bn in December to $5.1bn in July. The Head, Africa Research, Standard Chartered Bank, Mrs. Razia Khan, said falling oil revenues should be a worry for the government, especially with a presidential election scheduled for early 2015. The Financial Times reported that previous polls had been preceded by a sharp increase in spending and leakages in revenue collection as politicians tried to buy their way to power. "Nigeria still has a comfortable current account surplus, but it is declining, as is the Excess Crude Account. Unless we see a turnaround in oil revenues, investors are going to start to get concerned," Khan said.

"It's a reflection of the headwinds facing oil companies in Nigeria," she added. The country's production difficulties have helped push global crude prices above $110 a barrel. The country had budgeted for oil sales of 2.5 million bpd in 2013, which, combined with the high petroleum prices, should have allowed for substantial savings in the Excess. But instead of increasing, the fund has been run down from $9bn in December to $5.1bn in July. The Financial Times reported that previous polls had been preceded by a sharp increase in spending and leakages in revenue collection as politicians tried to buy their way to power. "Nigeria still has a comfortable current account surplus, but it is declining, as is the Excess Crude Account While I am not happy about wars anywhere, this Syrian crisis presents a very good opportunity for Nigeria to generate serious revenue to aid important projects. However, this report implies what I fear: a depletion of our reserves probably to fund 2015 elections.

Bank exchange rate as of yesterday. Still to climb