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How Far Could the Naira Go?: A Zero Equilibrium® Analytical Brief on the Nigerian Local Currency.

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By Chinedu Okoye  The Naira strength has persisted through the wars, as the central bank had sufficient reserves for interventions to smoothen out liquidity squeezes. The closing of passage through the Straits of Hormuz thoug it pushed oil prices higher and by extension oil revenues, had a double whammy effect from an increase in already energy prices. However, the reopening of the Strait of Hormuz after a brief spell of geopolitical tension has delivered an almost immediate recalibration across global markets. As Oil flows are expected to normalize, risk premium compressed, and the reflexive safe haven US to lose some of its urgency. A narrow window, through which the Naira breathes, but not relief in the structural sense. It is supply relief, and not solvency or diaporan remittance dependency repair. At the surface, the mechanics looks pretty straightforward. A weaker USD eases imported inflation pressures and softens the exchange rate pass-through. Simultaneously, re...
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Zero Equilibrium FX Note: Naira Mean Reversion?

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1.0 Outlook v Reality: In our paper “ ZE 12-Month Naira Outlook ” we posited a bearish to nuetral Naira exchange rate in 2026, September. That thesis has three scenarios, a strong case, base case and bear case scenario. In the paper the implied forward suggest led a bid-ask spread of N1,703/$ - N1,793 which implied  a “+14.3% to +19.7% USD appreciation versus the spot rate”  as at the time of the article. Strong, Base and Worst Case Scenario: Strong Case Scenario; N1450 - 1550/$; Baseline Scenario; N1535 - N1600; and, Worst case scenario of N1700 - N1950/$ (ZE September 2025 12+Month Naira Outlook Pictogram) Since the advent of the year 2026, the Naira strengthened against the USD so much so that the Central Bank of Nigeria (CBN) did a reverse mop up (buying dollars) to stem the steep rise in the Naira. Market sentiments however show a different picture as the NAFEM-BDC spread widenes from N21.45/$ to about N45/$ approximately. We discuss the new bearis...
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Shadow Credit Dominance and Monetary Transmission Failure in Nigeria: From Constraint to Exploitation

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– By Chinedu Okoye  Introduction and Summary: This paper dicuses the over extended tightening of monetary policy in Nigeria, giving the exorbitant rates in the non-bank financial sector. From the inception of demand management policies, monetary policy tools has undergone a series of regulatory changes, cyclical downturns, etc, however this has also been accompanied by intense periods of success on an annualized average. This has not been unique to Nigeria but a general occurrence amongst all central banks. Now, whilst the availability of credit has increased, as new Fintech Apps (non-bank) lenders exploited a gap, seen as the regulations which banks abide by, is somewhat restrictive, and some of these bank are as a result concentrating on individuals and corporates and with lesser risk profile. As a result the Fintech based credit companies (or shadow banks), absent regulations took the initative and considerable risk, to fill this gap and also capture the unbanked. Th...
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Is the NGX All Share Index Overvalued? : Zero Equilibrium® Macro-Based Analysis if the Nigerian All Share Index from a Minskian Perspective.

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– By Chinedu Okoye  Summary: • The NGX 30 growth closely tracking the broader NGX ASI on an intraday, monthly and annual basis  (+0.53% vs +0.54%), shows a balanced growth in the index as large caps aren’t lagging while small/mid caps aren’t outperforming. • The NGX 30 provides the bulk of influence as it accounts for roughly 70% of the ASI, with Banking (30%), MTN (25%), Industrials (20%), Oil & Gas (7.5%), Consumer Goods (7.5%), and other stocks (10%). • The rally is powered by both institutional money (pension funds, asset managers) and retail participation, with visible large block trades confirming broad-based and synchronized market activity. • A Minsky moment would not be surprising as the market is likely in the Speculative phase, where core drivers rise with the rest of the market, but some stocks remain closer to Hedge or Ponzi phases, making the NGX 30 vs ASI divergence and small/mid-cap optimism early warning signals. • The market shows healthy expa...
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Zero Equilibrium® Markets and Macro Weekly Report:

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- By Chinedu Okoye  Summary: • This week saw a divergence between developed‐market indexes, as European and UK stocks ended the week higher, as did Japan’s Nikkei. By contrast, US indexes slipped with the Dow Jones Industrial Average (DJIA), NASDAQ and S&P 500 all down by over 1% on the week. • The Nigerian equity markets pushed higher on rising oil prices and bargain‐hunting, with the NGX All-Share Index (ASI) up seven-tenths of a percentage point to N198k. This is as energy stocks led gains, followed by industrials and Telco (MTNN). • Oil prices continued their rally. WTI crude climbed above $98.70 and Brent $103.14 by week’s end (roughly +50% over the past month), reflecting tight Middle East supply.  • Precious metals weakened as gold eased (to $5,051.10/oz on Mar.13) and silver fell further to $81.343, outpacing Gold on the weekly and monthly opposite directions. As industrial metal copper stayed down, extending monthly declines. • Global bond prices slid ...
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The Paradox of Sound Money: A Post-Keynesian critique of Austrian monetary theory

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“Sound money can become paradoxical when the stability it promises suppresses the credit that growth requires” - By Chinedu Okoye   1.0 Austrians Monetary Theory: Austrians abhor fiduciary credit creation, and fractional reserve banking, preferring a full reserve banking without the ability fo banks to extend credit beyond the reserves they hold. To them [Mises and Hayek] fiduciary credit expansion distorts the structure of production, leading to unsustainable nooms, and central banks, the reason for inflationary pressures overtime, as the credit expansion the enable, pushes interest rates below it's natural rate (the rate it would otherwise be if determined solely by the market and the monetary authorities do not intervene), causing malinvestment from cheap more accessible credit, and accompanied by inflation. 2.0 The Cantillon Redistribution : The same Austrian logic (F. Hayek) states that when new money is injected into the system, it doesn't spread evenly, and f...
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Nigeria’s Shrinking Production Possibility Frontier: Zero Equilibrium's Structural Perspective on the Nigerian Relative Economic Decline.

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- By Chinedu Okoye  1.0 Introduction: Production Possibility Frontier. In elementary economics, one of the most powerful conceptual tools used to illustrate a nation's productive capacity is the Production Possibility Curve or Frontier as I prefer (PPF). The PPF represents the maximum combination of goods and services an economy can produce when all resources are efficiently utilized. The concept of the Production Possibility Frontier, introduced by Gottfried Haberler (1936), provides a graphical representation of the trade-offs an economy faces in allocating scarce resources. Haberler introduced the PPF, because prior trade theory relied heavily on David Ricardo’s model of Comparative Advantage, which was expressed using the labour theory of value and based on the idea that countries should focus on goods the can produce more efficiently. With no thought to opportunity cost. Haberler improved the framework by replacing labour values with opportunity cost, which is the ...
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