Nigerian naira dropped as much as 27 percent against the dollar

Financial Markets
Global stocks rallied on Monday and the U.K. pound strengthened broadly after the latest poll showed
support for Britain staying in the European Union regaining momentum before this week’s referendum.
Europe’s Stoxx 600 index surged 3.7 percent, heading for its biggest gain since August, and U.S. equities
opened higher with the S&P 500 Index rising 1 percent in morning session. MSCI’s gauge of emerging-
market stocks jumped 1.6 percent, the most in more than 2 months, with shares in Emerging Europe
markets leading the advance. The pound gained against all except one of its 31 major counterparts,
rising the most since December 2008 against the dollar.

Nigeria’s naira depreciated as much as 27 percent to 254 per dollar on Monday after the country’s central
bank removed its currency peg to ease chronic foreign currency shortages. Demand for foreign currency
has reportedly built up to about $3 billion since capital controls were imposed 15 months ago to defend
the currency’s peg of 197-199 per dollar. The central bank has also said it may inject foreign exchange
into the interbank market to boost liquidity.


Advanced Markets
Euro Area construction output shrank 0.4 percent (y/y) in April, the first drop since September 2015,
following a 0.5 percent increase in March. The decrease in construction was partly attributed to a decline
in building construction, which was offset by an increase in civil engineering. Among the region’s largest
economies, France and Spain both posted slumps in construction output. On a monthly basis,
construction edged down 0.2 percent in April, following a slide of 1.0 percent in March.

Germany’s producer prices (an early gauge of inflationary pressures) dropped 2.7 percent (y/y) in May
2016, slower than the 3.1 percent decrease in April and slightly below the markets expectation of 2.8
percent drop. The index has been in a decline since August 2013, figures from Destatis showed. Prices of
energy fell the most, followed by intermediate goods and non-durable consumer goods. This was offset
by an increase in the cost for capital goods and durable consumer goods. On a monthly basis, producer
prices gained 0.4 percent in April, faster than the 0.1 percent increase in April, and in line with the
expectations.


Emerging and Developing Economies
Europe and Central Asia

Reaching the lowest since October 2015, Russian unemployment rate was 5.6 percent in May, less than
expected and down from 5.9 percent in April. The number of unemployed people fell by 217,000 to 4.3
million. Meanwhile, retail sales in Russia decreased 6.1 percent (y/y) in May, following a revised 4.9
percent drop in April. On a monthly basis, retail trade rose 0.8 percent.

The Georgian economy grew 2.6 percent (y/y) in Q1, lower than 2.9 percent in Q4. Increased output were
recording for mining and quarrying, construction, hotels and restaurants and real estate, renting and
business activities. In contrast, output declined in transport and utilities.
                                                    1
Sub-Saharan Africa

The Namibian economy expanded 3.5 percent (y/y) in Q1, following an upwardly revised 2.9 percent
growth in Q4. Sectors that expanded included mining, manufacturing and wholesale and retail trade. In
contrast, agriculture output declined at a faster pace.

June 20, 2016



The Global Daily is an informal briefing on global economic and financial developments compiled by the
World Bank’s Development Economics Prospects Group. Recent issues, together with analysis of a
variety of macroeconomic topics, covered by the Group, may be found at:
 http://www.worldbank.org/prospects.

The views expressed in the Global Daily do not necessarily reflect those of The World Bank Group, its
Board of Executive Directors, or the governments they represent. Feedback and requests to be added to
or dropped from the distribution list may be sent to: Derek Chen (dchen2@worldbank.org).




                                                   2