February 28, 2022 FX, Money Market, Fixed Income Summary Report

The naira fell by 0.16% to NGN416.67/USD in the I & E exchange window, while it stayed flat at NGN416.52/USD in the CBN Interbank market. However, there exists a disparity in the parallel market as it exchanges between NGN573/USD and NGN580/USD, depending on the state, location, amount and negotiating power.

However, the external reserve picked up due primarily to an increased inflow from the rise in crude oil prices.

Thus, the external reserve gained $60 million in the past week while the MPR/lending rate and the inflation rate remained unchanged at 11.50 percent and 15.60 percent, respectively.

The overnight lending rate, which is the interest rate charged amongst banks when they borrow from each other in the overnight market, contracted by 267 bps from 15.0% to 12.3% following the absence of any significant funding pressure on the system.

The NTB secondary market traded slightly bearish as the average yield for the 150DTM declined by 46bps from its previous rate of 3.49% to close at 3.04%, while at the short-end and long-end, the yield curve stayed flat as market participants focused all their attention on the mid-end DTM of 150 days.

Similarly, the average yield in the OMO market remained unchanged at 4.6 percent.

Secondary market Treasury bond trading ended bullish following the decline of 5 bps to 10.9%.

The average yield fluctuated across the board as a series of buying activities were witnessed in the short, mid, and long-end segments of the market.

The average yield decreased by (-4bps,-2bps,-1bp,-1bp, &-22bps) for the APR-2023, MAR-2024, MAR-2025, MAR-2027, FEB-2028, and APR-2029, while it increased by -3bps for the JUL-2034.Finally, at the long-end, it declined by (-12bps, & -14bps) for the JUL-2045 and APR-2049 bonds, respectively.