NewsOnline reports that Billionaires, forex market speculators, and anyone holding a significant pile of dollars are set to benefit from the global market turmoil which has precipitated a massive decline in asset classes globally.
The cryptocurrency market is down by almost 50% from its year high why stocks plummeted to their worst week in over a year as investors scampered to get their money out.
The market sell-offs were triggered by confirmation that the US Feds will raise interest rates at least three times this year in response to the galloping inflation in the US. While rising interest rates are bad for most portfolio investors, especially those with leverage, it appears to be positive for local Nigerian forex holders.
The US Treasury yield closed 1.77% on Friday, hitting an all time high. Back in the early eighties when US inflation was high, treasury yields topped 15% forcing a change in government.
Nairametrics analysts expect a rise in interest rate to be net positive for Nigerians who hold dollar positions locally and especially abroad.
We believe it is likely this could impact on any incentive to hold naira. If dollar interest rates rise as we suggest, very few holders of forex will be incentivized to sell.
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