ors require. Last week rates moved back up. As we argue on page 2, a soft outlook for US rates does not necessarily mean lower rates in emerging markets, especially if a US slowdown in growth implies weak oil prices.In the principal foreign exchange market, the NAFEX market, foreign investor participation remains high, providing 52% of liquidity. The three-month moving average figure of the Central Bank of Nigeria’s foreign exchange reserves stands at US$45.
Last week the World Bank’s publication Global Economic Prospects, June 2019 cut its forecast of global growth in 2019 from 2.9% y/y to 2.6% y/y. With oil inventory levels high there was little to support oil prices at this point. Saudi Arabia, which implemented production cuts earlier this year, is reported to be negotiating with Russia to coordinate efforts to reduce supply. Much depends on the outcome of those talks, in our view.The Nigerian Stock Exchange All-Share Index recorded a loss of 2.
The next lesson came early this month when the leadership of the US Federal Reserve abandoned its neutral policy stance in favour of accommodating growth in the US economy. In other words, the US Federal Reserve has become less concerned about the inflationary effects of America’s various tariff wars than with the growth outlook and it is prepared to cut interest rates to preserve growth. This was its second big change of the year to date.