January 6, 2022 FX, Money Market, Fixed Income Summary Report

The naira has continued to show strength as it gained an additional 1.16% at the I & E window to close at NGN416.00/USD, while it lost 0.04% in the CBN interbank market to close at NGN413.67/USD.

Meanwhile, the naira continues to fluctuate between NGN573/USD and NGN575/USD in the parallel market.

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 the huge inflow coming from the increase in crude oil prices.

In the money market, the overnight lending rate was reduced by 225 bps to 5.3% following the absence of any funding pressure on the system.

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

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

Trading in the treasury bond secondary market ended slightly bearish as the average yield expanded by 0.8% to close at 11.4%.

The average yield grew marginally at the short end by +4bps to close at 11.50%, following profit-taking pressure at the JAN-22-2026 (+23bps), while at the mid-end, the average yield contracted by -3bps to close at 12.87%, following sell pressure at the MAR-18-2036.

Finally, the average yield contracted marginally at the long end by -13bps to close at 13.15% following demand for the MAR-27-2050 bond.