February 15, 2022 FX, Money Market, Fixed Income Summary Report

The naira gained 0.2% at the I & E window to trade at NGN416.00/USD. Despite demand pressure on the local currency, it still managed to stay flat at NGN417.37/USD and NGN570/USD in the CBN interbank market and parallel market, respectively.

There wasn't a lot of demand for money in the money market, so the overnight lending rate fell much further by 133bps to close at 1.9%, down from its previous session figure of 3.30%.

The inflation rate was released by the NBS yesterday, which showed an 87bps drop from the previous rate of 15.63% to 15.6%. All other economic parameters, such as the MPR/Lending Rate and the external reserve, remained unchanged at 11.50% and 39.98 billion USD, respectively.

The average yield of the Nigerian Treasury Bill (NTB) secondary market declined by 10bps to close at 4.1%, as against its previous session figure of 4.3%.

However, the average yield expanded by 27bps to close at 5.5% in the OMO segment.

Unfortunately, trading activity in the treasury bill secondary market stayed flat.

Finally, in the secondary market for treasury bonds, there was a lot of buying activity as this forced the average yield to fall by 3bps and close at 11.4% as against 11.54%. Across the curve, the average yield expanded at the short end, following investors’ sell-offs on the MAR-23,2025 (+17bp) bonds, but increased at the mid and long end with the FEB-23, 2028 (-37bps), APR-26, 2049 (-10bps), and MAR-27, 2050 (-11bps), respectively.