Interbank Market News Scan: Biden releases budget; inflation may not be that high next year; Nigeria’s central bank injects liquidity

Interbank, Pakistan, rupee. “The rupee reached a new record low on Monday, selling at 182.19 against the dollar in the interbank market, as political uncertainty triggered by a no-confidence move against Prime Minister Imran Khan weighed on sentiment, dealers said.” See article here. Source: The International News.

Interbank, Nigeria, naira, Access Bank. Similarly, (Access Bank) states that operating expenses at bank-level was up marginally by 2% year on year, showcasing the effectiveness of cost-cutting measures whilst also noting that FX rates on the Interbank market continued upward trend by 6% year on year to stand at N424 per dollar mainly driven by rate adjustments and lean supply. See article here. Source: Nairametrics.

Interbank, Pakistan, rupee. “The buying rate of 1 SAR to PKR was Rs 48.050 and the selling rate of 1 SAR to PKR was Rs 48.850 in the interbank market on Mar 28, 2022.” See article here. Source: BOL News.

Interbank, LIBOR, SOFR. “With a war waging in Central Europe, inflation at 50-year highs and the U.S. central bank looking to raise interest rates multiple times this year, you’d think that the average mortgage banker already has a pretty full plate. But add to the list of woes the Fed’s abortive transition from Libor to the Secured Overnight Financing Rate or SOFR and you have a recipe for disaster later this year.” — Christopher Whalen. See article here. Source: National Mortgage News.

Interbank, Nigeria, open market operations, naira. “In pursuant of its pro economic growth monetary policy the Central Bank of Nigeria, CBN, increased its net liquidity injection into the interbank money market by 110 per cent  to N770 billion in the first quarter of the year, Q1’22, from N367 billion in the fourth quarter of last year, Q4’21.” See article here. Source: Vanguard Nigeria.

Interbank, U.S., inflation, dollar. “Neuberger Berman expects extreme bond market volatility to stabilise and is counting on opportunities scooping up cheap high-yield and investment grade bonds in the telecom and energy sectors.” See article here. Source: Financial Review.

Interbank, U.S., budget, taxes. “Today, President Joe Biden released the FY2023 Budget to propose critical investments that will prioritize security at home and abroad, bolster the economy, promote health, tackle climate change, and further opportunity for all.” See article here. Source: U.S. Department of the Treasury.

Foreign exchange rates and dollar index as of 29 March 2022, 3:20 am GMT

Currency Pair28 March 202229 March 202230 March 202231 March 20221 April 2022
EUR/USD1.098341.09717   
GBP/USD1.317661.31204   
USD/CNY6.365266.37031   
USD/CHF0.930150.93439   
USD/NGN415.25415.181   
USD/ZAR14.527214.6255   
USD/AOA449.768448.000   
USD/INR76.01178.9895   
USD/JPY122.07123.527   
USD/SAR3.745243.74524   
Dollar Index99.0099.04   
Sources: OANDA, MarketWatch

Africa: Foreign exchange rates of interest as of 10:13 am AST

Currency Pair7 March 20228 March 20229 March 202210 March 202211 March 2022
USD/NGN415.769414.987414.987  
USD/GHS7.05397.038567.03856  
USD/ZAR15.353415.307415.3074  
USD/GMD52.965453.058253.0582  
USD/AOA470.136470.436470.436  
USD/UGX3,582.843,586.453,586.45  
USD/RWF1,017.671,012.151,012.15  
USD/KES113.073113.103113.103  
Dollar Index98.7398.9498.45  
Sources: OANDA, MarketWatch

The Interbank Market News Scan: Jobs report adds to the argument that the U.S. is at full employment.

Interbank, Kazakhstan, tenge. “The Kazakh tenge KZT= weakened 2.6% to 509.70 per dollar on the interbank market on Friday, Eikon Refinitiv data showed.” See article here. Source: Nasdaq.

Interbank, China, foreign exchange. “The following are the central parity rates of the Chinese currency renminbi, or the yuan, against 24 major currencies announced on Friday by the China Foreign Exchange Trade System.” See article here. Source: Xinhuanet.

Interbank, Russia, stock market. “A Russian stock market analyst pulled out a bottle and drank to the death of Russia’s stock market during an interview live on local television. The clip went viral Thursday, a week into the Russian invasion of neighboring Ukraine and as Russia’s economy is hammered with Western sanctions.” See article here. Source: CNBC.

Interbank, blockchain, bitcoin. “Dr. Eswar Prasad, professor of Trade Policy at Cornell University and author of ‘The Future of Money: How the Digital Revolution is Transforming Currencies and Finance,’ discusses the pros and cons of Bitcoin as a currency.” See article here. Source: CNBC.

Interbank, money markets. “A closely-watched measure of money-market stress and dollar funding conditions rose again on Friday to its highest level since May 2020, as the knock-on effects of the war in Ukraine rippled out globally.” See article. Source: Reuters.

Interbank, United States, labor, jobs report. Non-farm payrolls rose by 678,000 in February while the unemployment rate fell to 3.8%. See report here. Source: U.S. Bureau of Labor Statistics.

Foreign exchange rates and dollar index as of 9:40 am AST

EUR/USD=1.10805

GBP/USD=1.33712

USD/CAD=1.26463

USD/MXN=20.6664

USD/NGN=415.42

USD/GHS=6.80185

USD/INR=75.7279

USD/JPY=115.606

USD/CNY=6.31788

USD/BTC=0.00002

Source: OANDA

Dollar Index-98.58

Source: MarketWatch

Interbank market news scan: Federal Reserve lists principles for reducing its balance sheet; foreign exchange rates of interest …

Interbank, Federal Reserve. The Board of Governors of the Federal Reserve reiterated that its primary policy tool for managing the money supply, maintaining stable prices, and pursuing maximum employment is the federal funds rate, the interbank, overnight rate banks apply when lending reserves to each other. The Board will reduce its balance sheet of assets after its initial raising of the federal funds rate which markets expect to occur in March 2022. Legal advisors should keep this in mind when reviewing or counseling clients on foreign exchange contracts. To see the Board’s release, follow this link.

Interbank, US Dollar. Analysts are expecting further slippage in the euro versus the dollar given the Board of Governors of the Federal Reserve’s decision last Wednesday on interbank overnight lending rates (the federal funds rate). Analysts are seeing the EUR/USD falling to support levels as low as 1.10. Legal advisors should keep this in mind when advising clients on foreign exchange contracts. To see this article, follow this link.

Interbank, SONIA. As banks transition from LIBOR to alternative interest rate benchmarks, here is a discussion on implications from and an update on the status on making the change from LIBOR.

Interbank, European Central Bank. The ECB issues a statement on historically low number of counterfeit banknotes. Approximately 347,000 banknotes were withdrawn from circulation. To see this article, follow this link.

Foreign exchange rates of interest to Atlanta’s immigrant community

EUR/USD=1.1180

GBP/USD=1.3406

USD/MXN=20.7530

USD/GTQ=7.5208

USD/NGN=414.8790

USD/GHS=6.1895

USD/VND=22,633.9000

USD/JPY=115.0500

USD/INR=75.1226

USD/BTC=0.00003

USD/ETH=0.00041

Source: OANDA

Foreign exchange rates of interest to Atlanta

The Vietnamese dong, Mexican peso, Indian rupee, and Nigerian naira ended relatively flat this week. These currencies are the home currencies of the Atlanta area’s largest immigrant groups. The dong closed .0007%. The naira was down .0003%. The rupee and peso were down .0019% and .0018%, respectively.

The Federal Reserve may have seen today’s jobs situation report as incentive to stay on course with its expected fed funds rate increases later this spring or summer. The unemployment rate fell to 3.9% with non-farm payrolls increasing by 199,000 workers. Historically, numbers like these are an indication of full employment and could be a threshold to wage inflation and a sign of increased economic activity. Increased economic activity may see the dollar become more expensive along with an increase in demand for dollar denominated assets.

The Federal Reserve was quiet today with no statements made by any members of the Board of Governors; likely the silent hangover from the holidays.

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Disclaimer: The above is provided for informational purposes and should not be construed as financial or legal advice or as creating an agreement to provide financial or legal advice.

Foreign exchange rates of interest …

USD-DXY=96.30

The US dollar index strengthened today versus its 2 January 2022 reading. On 4 January 2022, the USD-DXY was at 96.30, up from a reading of 95.73 on 2 January 2022.

USD-MXN=20.5131

The Mexican peso continued its strengthening against the US dollar. On 4 January 2022, the USD-MXN registered at 20.5131, down from the 2 January 2022 level of 20.7538.

USD-INR=74.2541

And like the peso, the Indian rupee also showed some strength over the prior two-day period. The USD-INR printed at 74.2541, down from the 2 January 2022 level of 75.5300.

USD-VND=22,830.2

The Vietnamese dong appeared flat over the 2-day period coming in today at USD-VND=22,830.2 versus the 2 January 2022 exchange rate of 22,838.

USD-NGN=410.627

Finally, Nigeria does not want to be left out of the strengthening game. Today the USD-NGN came in at 410.627, down from 411.450 on 2 January 2022.

Source: OANDA

Alton Drew

4.01.2022

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Disclaimer: The above is provided for informational purposes and should not be construed as financial or legal advice or as creating an agreement to provide financial or legal advice.