October 6, 2020/Coronation Report

A year ago this month the Central Bank of Nigeria (CBN) banned most domestic institutions from buying new issues of its open market operation (OMO) bills.

The result was an exodus of money from the OMO market into government bills and bonds, which has driven down rates without a break for coming up to one year.

While we think that this trend is likely to continue for the rest of this year, what of next year? Much depends on how policy makers wish to finance the government deficit and how (if at all) they want foreign investors to play a role.

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