March 28, 2022/Coronation Research
Summary
- Opening market liquidity was reported at N426.02bn on Friday (18 March ‘22). Overnight and repo rates closed within a range of 9.0-12.0%. The average NTB yield declined by -13bps w/w to close at 3.3%. At the primary market NTB auction, the CBN offered N58.04bn but allotted N172.6bn worth of NTBs to market participants. This was largely due to improved system liquidity on the back of FGN coupon payments of N142.1bn and OMO maturities of N105bn. The stop rates changed across the three tenors; 91-day: 1.7% (previously 1.8%), 182-day: 3.0% (previously 3.3%), 364-day: 4.0% (previously 4.1%).
- Meanwhile, the average yield for OMO bills declined by -30bps w/w to close at 3.6%. At the primary market OMO auction, the CBN allotted N40.0bn worth of OMO bills across all three tenors and the stop rates remained unchanged from the previous auction (89-day: 7.0%, 173-day: 8.5%, 348-day: 10.1%).
- As for the secondary market for FGN bonds, the average yield increased by 10bps w/w to close at 10.5%.
- At its latest meeting, the Federal Open Market Committee (FOMC) voted unanimously to increase the target range for the federal funds rate to 0.25% – 0.50%. This can be partly attributed to the rising inflation on the back of high energy prices as well as the improvement in economic activity and employment.
For the full Coronation fixed income and exchange rate (CFEX) update, please click here.
