January 5, 2022 FX, Money Market, Fixed Income Summary Report

The naira kicked off 2022 on a positive note as it appreciated by 2.92% at the I & E window to close at NGN422.67/USD, while it stayed the same at NGN413.49/USD and NGN575/USD in the CBN interbank market and parallel market, respectively.

According to data from Cordros Securities, Inflation figures from the Nigerian Bureau of Statistics (NBS), still stayed at 15.40% as we await an updated figure from the agency, while the Monetary Policy Rate (MPR) stayed at 11.50%.

The gross external reserve stayed at USD40.53 billion. We are hopeful of an increase due to huge inflow coming from the increase in crude oil price.

In the money market, the overnight lending rate was reduced by 300bps to 7.5% following inflows from OMO maturities (NGN70.00 billion).

The average yield of the NTB secondary market stayed at 4.4%, albeit with a bullish focus.

Similarly, the average yield expanded by 4bps at 5.5% in the OMO segment.

Trading in the treasury bond secondary market ended slightly bearish as the average yield expanded by to close at 11.4%.

The average yield closed lower at the short (-1bp) end of the benchmark curve, following buy pressures on the APR-2023 (-4bps) bond and FEB-2028 (-3bps) bonds respectively.

Finally, according to the report, the average yield expanded at the long (+6bps) end, as investors sold off the APR-2049 (+40bps) bond.