MONEY market Review

MONEY MARKET
IN the just concluded week, The Central Bank of Nigeria (CBN) sold treasury bills worth N302.42 billion through Open Market Operation (OMO) which partly offset the matured T-bills worth N422.05 billion. Hence, the liquidity impact of net inflows worth N119.63 billion as well as the recently distributed N720.88 billion by the Federation Account Allocation Committee (FACC) accounted for the ease in the financial system liquidity.
Consequently, the Nigeria Interbank Offered Rate (NIBOR) for overnight funds, one month and six months tenure buckets moderated to 9.19 per cent (from 14.20 per cent), 13.16 per cent (from 13.29 per cent) and 13.95 per cent (from 14.31 per cent) respectively.
However, analysts from Cowry Assets Management said NIBOR for three months tenure bucket increased to 13.69 per cent (from 13.44 per cent). Meanwhile, Nigeria Interbank Treasury True Yields (NITTY) dipped for most maturities tracked as investors’ demand for treasury bills in the secondary market increased, yields on one month, six months and 12 months dwindled to 12.33 per cent (from 12.49 per cent), 12.88 per cent (from 13.29 per cent) and 15.10 per cent (from 15.21 per cent) respectively, However, yield on three months maturity increased to 12.61 per cent (from 12.03 per cent).

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FOREX MARKET
IN the just concluded week, Naira/Dollar (NGN/USD) rate fell (i.e. Naira appreciated) at the Investors and Exporters foreign exchange (FX) Window (I&E FXW) by 0.10 per cent to close at N362.02/USD, in line with our expectation.
However, the NGN/USD exchange rate was flattish at the Bureau De Change as well as the parallel (“black”) markets, closing at N358.00/USD and N360.00 respectively.
Elsewhere, the Naira depreciated against the US Dollar by 0.03 per cent to close at N358.13/USD at the Interbank Foreign Exchange market despite the weekly injections of USD210 million by CBN into the foreign exchange market via the Secondary Market Intervention Sales (SMIS).
Meanwhile, the Naira/USD exchange rate fell (i.e. Naira appreciated) for most of the foreign exchange forward contracts, one month, two months, three months, six months and 12 months rates fell by 0.11 per cent, 0.09 per cent, 0.03 per cent, 0.26 per cent and 0.42 per cent to close at N365.31/USD, N368.73/USD, N372.28/USD, N382.97/USD and N409.45/USD respectively.
However, spot rate was flattish at N306.95/USD.

BOND MARKET
THE Debt Management Office (DMO) sold bonds worth N146.61 billion, viz: 12.75 per cent FGN April 2023 (five- year re-opening) worth N20.33 billion, 14.55 per cent FGN April 2029 (10- year re-opening) worth N71.16 billion and 14.80 per cent FGN April 2049 (30-year re-opening) worth N55.12 billion respectively.
According to Cowry Assets Management Limited, amid economic uncertainty, all maturities were auctioned at higher stop rates of 14.39 per cent (from 14.29 per cent), 14.43 per cent (from 14.39 per cent) and 14.64 per cent (from 14.59 per cent) respectively, despite slowing inflationary trend, as investors priced in uncertainty premium. The values of FGN bonds traded at the over-the-counter (OTC) segment went in mixed directions.
Specifically, the 10-year, 16.29 per cent FGN March 2027 debt and the 20-year, 16.25 per cent FGN April 2037 lost N0.91 and N1.37 respectively. Their corresponding yields rose to 14.34 per cent (from 14.15 per cent) and 14.49 per cent (from 14.29 per cent) respectively.
However, the 5-year, 14.50 per cent FGN July 2021 paper and the seven-year, 13.53 per cent FGN March 2025 bond gained N0.13 and N0.16; their corresponding yields fell to 14.48 per cent (from 14.57 per cent) and 14.30 per cent (from 14.34 per cent) respectively.

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