March 1, 2022 FX, Money Market, Fixed Income Summary Report

The naira stayed flat at NGN416.67/USD, NGN416.52/USD in the I & E exchange window, and the CBN Interbank market, respectively. However, there is a big difference in the prices on the parallel market as it fluctuated between NGN573/USD to NGN580/USD depending on the state, location, amount, and bargaining power.

The external reserve picked up due primarily to an increased inflow from the rise in crude oil prices. In this case, the external reserve increased by $60 million in the last week, while the MPR/lending rate and the inflation rate stayed the same.

The overnight lending rate, which is the interest rate charged amongst banks when they borrow from each other in the overnight market, contracted by 200 bps from 12.30% to 10.30% following cash inflow of NGN70 billion from OMO maturities.

The NTB secondary market traded slightly bearish at the long-end as the average yield for the 254DTM and 268DTM expanded by 1bp and 2bps from its previous rates of 4.11%, 4.12% to close at 4.13% and 4.15%, respectively, while at the short-end and mid-end, the yield curve stayed flat.

Similarly, the average yield on OMOs remained unchanged at 3.0 percent.

Secondary market Treasury bond trading ended bullish following the decline of 11 bps from 10.9% to 10.8%.

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 following demand for the MAR 23–2024 (-60bps) and APR 26–2029 (-95bps) bonds, respectively.