A Financial economist has projected that the rising inflation rate experiencing in the nation’s economy will continue in that direction in the second half of this year.
Professor of capital market at the Nasarawa State University Keffi, Professor Uche Uwaleke who made this statement at the Finance Correspondent Association of Nigeria monthly capacity building programme said that high inflation rate is detrimental to return on investment.
He said that no investor will like to engage in any Investment that will bring low return at the end of the day.
Speaking on “Impact of Electioneering on Fixed income and Equity market, he said high inflation in an economy discourages investment noting that the exchange rate volatility create uncertainty in the system.
He pointed out that rising exchange rate would have impact on the economy as it would lead to exit of the foreign investors and as well as increase in demand for forex by Nigeria politicians.
He pointed out that the election year would cause yield in fixed income market to increase, stressing that Debt Management Office third quarter calendar showed that bonds are to be sold at coupon rates between 12.5 per cent and 13.5 per cent while the nation’s equity market will continue to witness low performance with negative returns.