March 9, 2026/United Capital Report

In February 2026, The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) decided to reduce the Monetary Policy Rate (MPR) by 50bps to 26.50% at the first meeting of the year, citing consistent disinflationary trend and improving macroeconomic conditions. Meanwhile, the asymmetric corridor around the MPR was retained at +50bps/-450bps while the Cash Reserve Ratio (CRR) for commercial banks at 45.00% and 16.00% for merchant banks were left unchanged.

The 75.00% CRR on Non-TSA public sector deposits and liquidity ratio at 30.00% were also maintained. Overall, we note that these actions reflect growing confidence in the reform-induced macroeconomic improvements, evidenced by rising external reserves, sustained foreign inflows and better foreign exchange liquidity. 

We are cautiously positive about the local debt market in March, as we envisage a mixed to positive outing based on optimal liquidity conditions, which should spur buying activities, particularly on short tenor instruments. This outlook is also premised on the expectations of sustained but modest decline in inflation in line with recent trends amid the stable foreign exchange market.

We are likely to see volatility in yields, just as the stop rate on the 364-day bill increased by 83bps to 16.73% at the most recent treasury bill auction, while geopolitical tensions could potentially stoke pressure. Nonetheless, we expect yields to come in slightly lower by the end of March as demand and supply dynamics continue to play out between investors and the DMO.

Kindly find HERE, the full report, covering our analysis and considerations.