March 2, 2022 FX, Money Market, Fixed Income Summary Report

The naira stayed flat at NGN416.67/USD, NGN416.50/USD in the I & E exchange window, and the CBN Interbank market respectively, while the disparity in the parallel market still exists as the naira exchanges between NGN575/USD and NGN580/USD, depending on the state, location, amount and negotiating prowess.

The external reserve picked up due primarily to an increased inflow from the rise in crude oil prices. Thus, the external reserve gained more than $70 million so far following continued geopolitical tension between Russia and Ukraine. Accordingly, the following data ended up this way, external reserve, MPR/lending rate, and the inflation rate were $38.89 billion,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 733 bps from 10.30% to 3.00% following an absence of any significant funding pressure.

Trading in the NTB secondary market was positive, with the average yield falling by 15 basis points to 3.4 percent. Across the curve, the average yield remained steady in the short and mid segments but fell (-37bps) at the long end due to purchasing interest in the 239DTM (-63bps) bill. In the OMO market, the average yield rose by 32 basis points to 3.3 percent.

The Treasury bond secondary market was dominated by bullish feelings, as the average yield fell by 6 basis points to 10.8 percent. The average yield declined throughout the benchmark curve at the short (-5bps) and mid (-17bps) segments owing to demand for the JAN-2026 (-17bps) and MAR-2027 (-41bps) bonds, respectively. At the long end, though, the average yield was flat.