Interbank market news scan: Australian central bank wants to see a tighter labor market …

Follow the links …

Australia’s central bank believes it will take a significant and sustained tightening in the labor market to lift inflation to more comfortable levels, a tough task that could take years to achieve. Australia’s central bank says tighter labor market will lift inflation (cnbc.com)

A body representing cryptocurrency and blockchain stakeholders in Nigeria has joined other crypto industry players in assailing the recent Central Bank of Nigeria (CBN) directive to banks. The CBN order, which seeks snuff out crypto entities from the banking system, took effect on February 5, 2020. Nigeria Crypto Ban: Stakeholder Body, Politicians Assail Central Bank’s Directive to Financial Institutions – Emerging Markets Bitcoin News

Indonesia’s central bank is seen trimming its benchmark rate for the first time this year on Thursday, on top of the five rate cuts it has delivered since the start of the coronavirus pandemic, according to a majority of analysts in a Reuters poll. Indonesia’s central bank seen making this year’s first rate cut | The Star

As cryptocurrencies increasingly go mainstream, pressure is growing on the world’s biggest central banks to move forward with their plans to issue digital cash and fend off private sector threats to traditional money. Bitcoin’s mainstream charge raises stakes for central bank digital cash – Technology – Dunya News

Currency pairsExchange Rate as of 4:15 pm 8 February 2021(1) As of 12:23 am EST Exchange Rate as of 16 February 2021(2)(3)
AUD/USD0.7656 0.7803
USD/CAD1.2781 1.2619
USD/CNY6.4664 6.4542
EUR/USD1.2035 1.2139
USD/INR72.8500 72.6320
GBP/USD1.3714 1.3939
USD/JPY105.4400 105.5800
USD/MXN20.1300 19.9410
USD/DKK6.1785 6.1255
USD/NOK8.5428 8.3658
BTC/USD  45,471.7000
ETH/USD  1,683.8900
Sources: Federal Reserve (1) ; Reuters-exchange rates (2) ; OANDA-cryptocurrency (3)

16 February 2021

Interbank market scan: Lagarde sees holding crypto as “unlikely.” Central Bank of Nigeria explains “no to crypto.” India pursues crypto law

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European Central Bank President Christine Lagarde on Wednesday said she didn’t consider bitcoin to be a real currency, adding that central banks won’t be holding it as reserve currency anytime soon. ECB president Christine Lagarde says it’s ‘very unlikely’ that central banks will hold bitcoin in the near future (msn.com)

Following its ban on cryptocurrency-related transactions in the country, the Central Bank of Nigeria has explained why it was done. CBN  boss disclosed that the digital currency is used for money laundering and terrorism. CBN explains why cryptocurrency transactions were banned (withinnigeria.com)

Kingsley Moghalu, former deputy governor of the Central Bank of Nigeria (CBN) has condemned the apex bank’s reason for stopping cryptocurrency transactions in the country. Moghalu condemns CBN’s reason for banning cryptocurrency transactions (withinnigeria.com)

On Tuesday (February 9), minister of state for finance Anurag Singh Thakur said that a cryptocurrency bill was being finalised and it would be sent to Union Cabinet soon. Cryptocurrency bill: Here’s what you need to know (msn.com)

Are central banks on the verge of a currency war with the U.S? Global central bank interventions raise specter of ‘currency war’ | Morningstar

“Bitcoin needs a couple more big endorsements, and that could be the key to take prices above the $50,000 level,” Edward Moya, senior market analyst for the foreign-exchange broker Oanda, wrote Tuesday.  First Mover: As Wall Street Fixates on Inflation Hedges, Good Luck Finding Bitcoin | Nasdaq

Bitcoin ‘can’t be stopped’: Nigerians look to peer-to-peer exchanges after crypto ban. Some Nigerians plan to continue using bitcoin and other cryptocurrencies despite a directive issued by the Central Bank of Nigeria last week ordering banks to close down accounts associated with cryptocurrencies. First Mover: As Wall Street Fixates on Inflation Hedges, Good Luck Finding Bitcoin | Nasdaq

The Federal Reserve Board on Tuesday announced the second extension of a rule to bolster the effectiveness of the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Like the earlier extensions, this one will temporarily modify the Board’s rules so that certain bank directors and shareholders can apply to their banks for PPP loans for their small businesses. Federal Reserve Board – Federal Reserve Board announces the second extension of a rule to bolster the effectiveness of the Small Business Administration’s Paycheck Protection Program (PPP)

Currency pairsExchange Rate as of 4:15 pm 8 February 2021 As of 1:00 pm EST Exchange Rate as of 10 February 2021
AUD/USD0.7656 0.7727
USD/CAD1.2781 1.2690
USD/CNY6.4664 6.4576
EUR/USD1.2035 1.2134
USD/INR72.8500 72.8500
GBP/USD1.3714 1.3841
USD/JPY105.4400 104.6600
USD/MXN20.1300 20.0543
USD/DKK6.1785 6.1317
USD/NOK8.5428 8.4504
Sources: Federal Reserve, Reuters

10 February 2021

Interbank market scan: Elon Musk, the market mover; China serious about its digital currency; Central banks, foreign exchange, cryptocurrency

In the news ….

China’s new bank loans are expected to surge to a record high in January on a seasonal boost, a Reuters poll showed, while credit growth may be constrained by some marginal tightening of monetary policy as the central bank focuses on preventing risks. China’s January yuan loans seen at record high, central bank to cool credit growth in 2021: Reuters poll | Reuters

Nigeria’s central bank said it ordered deposit-taking banks and other financial institutions to close accounts dealing in cryptocurrencies because it was threatening the country’s financial system. Nigeria Central Bank Says Cryptocurrencies Were A Threat – Bloomberg

The Central Bank of Nigeria (CBN) issued a five-page statement Sunday clarifying its position on cryptocurrencies after a regulatory warning to local banking institutions on Friday sent shockwaves through social media. Nigerian Central Bank Says Its Ban on Crypto Accounts Is Nothing New | Nasdaq

Beijing and Suzhou will issue a total of 40 million yuan (US$6.2 million) in the latest trials of the nation’s digital currency this week in a bid to boost consumption over the upcoming Lunar New Year holiday. China digital currency: Beijing, Suzhou confirm latest trials as e-yuan tests top 100 million yuan | South China Morning Post (scmp.com)

Tesla and SpaceX CEO Elon Musk thinks crypto could be the future but his choice of token might not be Bitcoin, the dominant cryptocurrency. Elon Musk Hints At ‘Ironic’ Possibility Dogecoin Becomes A ‘Real Currency’ (ibtimes.com)

Hopes for the U.S. economic recovery seem to be transforming the dollar from a haven asset to the risk-on currency of choice. Dollar Morphs Into Risk-On Currency Amid U.S. Growth Hopes – Bloomberg

In making the case for a mammoth $1.9 trillion economic relief package, President Joe Biden and his acolytes had maintained that economists across the board agreed that now is the time to go big in the fight against the pandemic. Well, so much for that. A number of prominent economists and former policy makers — from Democrat Lawrence Summers to Republican Douglas Holtz-Eakin — have raised questions in the past week about the size of the package. So too have some economy watchers in the financial markets. Yellen, Summers Spar About Overheating Risk in Stimulus Plan – Bloomberg

Taiwan penalized Deutsche Bank AG and three other foreign lenders after a probe into speculation on the surging local currency last year involving grain companies. Taiwan Penalizes Deutsche Bank, 3 Others for Currency Trades (msn.com)

8 February 2021, 8:12 am EST

Interbank market scan: Central Banks. Cryptocurrency. Foreign Exchange. A dim jobs report and Biden does not see full employment for ten years ….

Nigeria’s central bank ordered deposit-taking banks and other financial institutions to immediately close accounts transacting in or operating cryptocurrency exchanges, saying such deals are “prohibited.” Nigeria Central Bank Orders Cryptocurrency Accounts to Close (msn.com)

Turkey’s lira hit its strongest level since August on Friday and cemented its position as the top-performing currency in the world this year, after the central bank governor told Reuters that interest rates were unlikely to be cut for a “long time”. Turkish lira jumps as central bank chief says rate cuts long way off | Reuters

A rise in cost of Nigeria’s short-term debt and a weaker naira rate to sell dollars to investors in a month’s time signal that the country’s central bank may devalue the currency for the third time in less than a year. Rising Nigerian Central Bank Yields May Signal Naira Devaluation (msn.com)

Central bank stimulus sustain rally in cryptocurrency. Bitcoin boom backstopped by central banks’ easy-money policies | Financial Times (ft.com)

New governor Naci Agbal does not expect Turkey’s central bank to begin considering cutting interest rates from 17% until much later this year given upward pressure on already high inflation, and rate hikes are still a possibility, he told Reuters. Exclusive: Turkey central bank chief Agbal says no rate cuts for a long time this year | Reuters

The announcement this week that Viviana Taboada and Mauricio Villamizar will join Colombia’s central bank board generated not only confusion over the spelling of Taboada’s first name, but predictions that interest rate cuts may be on the horizon. New Colombia central bank board members may back rate cuts | Nasdaq

Australia’s economic outlook has improved markedly thanks to the successful suppression of the coronavirus, but even under the most optimistic assumptions wage growth and inflation will still be too low by mid-2023, the country’s central bank warned on Friday. Australia central bank sees inflation staying too low even in most optimistic scenario (msn.com)

The announcement this week that Viviana Taboada and Mauricio Villamizar will join Colombia’s central bank board generated not only confusion over the spelling of Taboada’s first name, but predictions that interest rate cuts may be on the horizon. New Colombia central bank board members may back rate cuts | Nasdaq

President Joe Biden ripped the results of the final jobs report of Donald Trump’s presidency, and used the weak job creation to illustrate the urgency of passing his Covid relief package. Biden Rips Last Jobs Report Of Trump Presidency: ‘At That Rate It’s Going To Take 10 Years Before We Get To Full Employment’ (mediaite.com)

Interbank market news scan as of 12:42 pm AST: central banks, cryptocurrencies, foreign exchange

Currency pairsFederal Reserve as of 25 January 2021Reuters as of 25 January 2021Reuters as of 26 January 2021 
AUD/USD0.77280.77130.7754 
USD/CAD1.27111.27511.2695 
USD/CNY6.48106.47846.4636 
EUR/USD1.21791.21381.2166 
USD/INR72.980072.954572.8814 
GBP/USD1.36851.36641.3733 
USD/JPY103.7600103.7600103.7700 
USD/MXN19.925020.110120.0006 
USD/DKK6.10816.12666.1245 
USD/NOK8.48208.54188.5475 
Sources: Federal Reserve, Reuters

The dollar’s strength continues to vary since our post yesterday.  The dollar weakened against the Australian dollar, the Canadian dollar, and the Chinese yuan.  The dollar also weakened against the British pound and the Mexican peso.  It continues to trade flat against the Japanese yen.

In other news …

Bank Indonesia will continue to maintain loose monetary policy until such signs emerge, given that inflation is currently under control, says Perry Warjiyo, the central bank’s governor. Indonesia may see signs of inflation pressure in fourth quarter of 2021: Central bank governor (msn.com)

Brazil‘s central bank does not expect to raise interest rates in the immediate future because of an unusually high degree of economic uncertainty, minutes from its last policy meeting showed on Tuesday, although fiscal risks could prompt it to tighten policy faster than its baseline scenario suggests. Brazil central bank unlikely to raise rates now as economy sputters, minutes show | Nasdaq

Nigeria’s central bank held its benchmark lending rate at 11.5% on Tuesday, governor Godwin Emefiele said at its first interest rate meeting of 2021. Nigeria’s central bank holds benchmark lending rate at 11.5% | Reuters

China’s central bank won’t exit “prematurely” from its supportive monetary policies while at the same time keeping debt risks under control, Governor Yi Gang said. China Central Bank Won’t Exit Prematurely From Stimulus, Yi Says – Bloomberg

No existing cryptocurrency has a structure that is likely to allow it to work as a means of payment over the long term, Bank of England Governor Andrew Bailey told an online forum hosted by the Davos-based World Economic Forum on Monday. Current cryptocurrencies unlikely to last, Bank of England governor says | Reuters

US waits for Senate election results from Georgia; strength of US dollar against European, African currencies a mixed bag …

PairsOANDA as of 4 January 2021OANDA as of 6 January 2021Notes
USD/KES108.391108.461Dollar flat
USD/NGN384.938381.690Dollar weakening
USD/GHS5.85245.85693Dollar flat
USD/CDF1950.611950.01Dollar flat
USD/AOA648.310649.149Dollar flat
USD/ZAR14.630914.8552Dollar strengthening
Source: OANDA

Meanwhile, as the count in Georgia comes to a close, yields on longer term notes begin to increase as the Senate gets closer to a 50-50 split and the likelihood of more spending under a Biden administration ….

RatesFederal Reserve as of 4 January 2021Bloomberg as of 6 January 2021 10:30 am AST
Federal Funds Rate0.090.08
Prime Rate3.253.25
3-month Treasury0.090.08
2-year Treasury0.110.13
10-year Treasury0.931.02
30-year Treasury1.661.78
Source: Federal Reserve, OANDA

And the buzz phrase again mid-week is dollar weakening as exchange rates for a number of foreign exchange pairs continues to fall. This in light of disappointing jobs numbers from ADP where the payroll company determined that 123,000 jobs were lost in December 2020.

PairsFederal Reserve as of 4 January 2021OANDA as of 4 January 2021OANDA as of 6 January 2021 10:45 am AST
GBP/USD1.36621.36331.35967
USD/CAD1.27531.27261.27269
USD/CNH6.52506.45526.43929
USD/DKK6.08396.06576.05823
EUR/USD1.22301.22641.22774
USD/INR73.010072.936773.0696
USD/MXN19.892019.838219.9091
USD/JPY103.1900103.02102.36
USD/NOK8.57578.53008.50760
USD/SEK8.20958.20918.20299
USD/CHF0.88410.88150.87959
Source: OANDA

Foreign exchange rates. Dollar continues its fall …

Foreign exchange rates of interest as of 9 December 2020, 5:30 pm AST:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78113 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28002 CAD

INR/USD = 0.01356 USD/INR=73.6386

CAD/USD= 0.78113 USD/CAD= 1.28002

JMD/USD= 0.00682 USD/JMD = 143.631

EUR/USD= 1.21122 USD/EUR = 0.82552

NGN/USD= 0.00260 USD/NGN = 379.723

CNH/USD= 0.15338 USD/CNH = 6.51859

JPY/USD = 0.00961 USD/JPY = 104.09

Source: OANDA

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Nigeria price of the US dollar falls versus other currencies.

According to data from OANDA, a foreign exchange brokerage, for the period 1 December to 5 December 2020, the Nigeria price of the US dollar fell 0.060% from 378.373 NGN to 378.145 NGN. The Nigeria price for the euro, British pound, and the yuan saw increases, however. The Nigeria price of the euro increased from 453.889 NGN to 458.285 NGN (0.969%) while the Nigeria price of the British pound increased from 506.130 NGN to 507.890 NGN (0.348%)

During the same period, the Nigeria price of the China’s yuan increased from 57.6594 NGN to 58.0075 NGN (0.604%).

As of 3 December 2020, the Bank of Nigeria reported that its interbank mid-range foreign exchange rate for the U.S dollar was 379.50 NGN while the interbank exchange rate for the euro came in at 460.375 NGN and the price for the British pound was 509.9342 NGN. Meanwhile the interbank foreign exchange rate for the Chinese yuan came in at 57.9137 NGN.

Nigeria’s interbank interest rate as of 2 December 2020 is .50.

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Foreign exchange rates in Bezos’ Africa play …

Last November, it was reported that Jeff Bezos, via his personal venture capital fund, would be investing in the Uganda-based financial technology firm Chipper Cash. In an effort to monitor the progress of capital flows into African countries within Chipper Cash’s footprint, we are beginning a series of blog posts documenting foreign exchange rates in these countries.

As of 8:24 am AST 4 December 2020, here are the exchange rates with Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya based on the U.S. dollar.

GHS/USD=0.17061 USD/GHS=5.82987

UGX/USD=0.00027 USD/UGX=3,668.06

NGN/USD=0.00262 USD/NGN=377.448

TZS/USD=0.00043 USD/TZS=2308.76

RWF/USD=0.00100 USD/RWF=974.557

ZAR/USD=0.06551 USD/ZAR=15.2518

KES/USD=0.00895 USD/KES=110.008

Source: OANDA

Legal/Political events impacting African currencies:

U.S. releases jobs report today

The U.S. Department of Labor today will release its jobs situation report which is expected to provide the U.S. and its trading partners with insights into the spending power of Americans. More individuals entering the labor market along with increases in wages should provide African nations trading with the U.S. a gauge on the capacity of the American consumer.