March 22, 2022 FX, Money Market, Fixed Income Summary Report

The naira lost 0.18% to trade at NGN417.00/USD in the I & E exchange window while it gained 0.02% in the CBN interbank market, trading at NGN416.32/USD.

The differential in the parallel market, on the other hand, shrank even further as the margin of difference closed. If you are buying, it currently trades between NGN580/USD and NGN582/USD. However, sales on the parallel market fluctuated between NGN565/USD and NGN575/USD. This depends squarely on the amount you want to sell, your location, and your negotiating prowess. 

All major economic indicators, such as the MPR/lending rate, inflation rate, and external reserves stayed the same at 11.50%, 15.70%, and $39.67 billion.

The overnight lending rate, which is the interest rate banks charge themselves when they borrow from each other in the overnight market, expanded by 200 basis points from 9.67% to 11.67% following a cash injection from matured OMO securities valued at NGN42 billion.

The secondary market for NTB notes was clearly optimistic, with the average yield closing slightly downwards from 3.3% to 3.2%. Across the curve, the average yield stayed unchanged at the short end, expanded at the mid as investors sold off the 100DTM (+20bps), 114DTM (+34bps), 128DTM (+48bps), and 142DTM (+16bps) bills, and shrunk at the long end, following investors' demand for 247DTM (-80bps) bills as the rate fell to 3.44% from 4.24%. Elsewhere, the OMO market's average yield remained unchanged at 3.6%.

Trading activities in the secondary market for treasury bonds were mixed, with a slight buying emphasis, as the average yield expanded by two basis points to close at 10.52%.

The benchmark curve's average yield expanded at the short and long ends as investors sold off the JAN-22, 2026 (+11bps) following an increased coupon rate from 10.04% to 10.15%, while the APR-18, 2037 (+8bps) bonds increased their coupon rate from 11.97% to 12.05%. However, the average yield stayed unchanged in the mid-segment.