June 15, 2020/Coronation Report

When a currency is under pressure you expect interest rates to go up, and the long-term (we mean 10-year) lesson is that this generally happens in Nigeria. But is it not happening now. A huge amount of liquidity held by investing institutions (such as pension funds and mutual funds) is seeking a home.

The result is over-subscription for Naira T-bill and Naira bond issues, and a range of market interest rates (see side bar) well below inflation. Tough times for savers, good times for issuers.

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