Inflation declined thanks to base effects in December, but monthly trends show no signs of easing:  The National Bureau of Statistics (NBS) put out the last monthly CPI data for 2022 which showed a moderation in the headline number to 21.34% from 21.47% in the prior month. This was not too surprising given the large […]

2022 Review: Bear flattening as short-term rates lead the curve higher Following the deep bear market of 2021, when fixed income yields reversed from the lows of 2020 and bond prices slumped 35%, the year 2022 opened to bullish sentiments occasioned by a tidal wave of liquidity from the uncontested redemption of the January 2022 […]

Build-up in system liquidity from NTB redemptions drives bullish trends across debt markets: Over the last two weeks, financial markets have been robustly liquid which has pushed interbank rates to 14-15% from the 16-20% range in the preceding weeks. The liquidity appears to have emanated from the nearly NGN2trillion of NTB redemptions by the DMO […]

Nigeria’s GDP growth slows on weak oil production, non-oil remains resilient: The National Bureau of Statistics (NBS) reported Q3 2022 output data which showed a deceleration in economic growth to 2.25% y/y relative to 3.54% print in Q2 2022. The main driver of the slowdown was the oil sector where output shrank 22% in Q3 […]

Inflation lost steam in October: False alarm or disinflation? The NBS put out CPI data for October which showed that headline inflation came in at 21.09%, behind market expectations for 21.3%. This reflects a second month of deceleration in the monthly print to 1.24% (September: 1.36%) due to a slowdown in food inflation. However, dissecting […]

CBN’s planned changes to Naira banknotes, much ado about nothing: On Tuesday, the CBN announced that it had received presidential approval to change the design of three bank notes (NGN200, NGN500 and NGN1000). In justifying its decision, the CBN cited a discomfort with large currency holdings outside the banking system (September 2022: 85% of currency […]

The Week that was (October 17-21) CBN rule change on SLF access drives low subscription at the auction, yields return to 15-16%: In the lead up to the October 2022 bond auction, the CBN had released a circular reiterating its rule that access to its discount lending window would not be available to banks on […]

The Weeks that were (Oct 1-15)Tight liquidity conditions push interbank rates over 16%: Following the September 2022 MPC meeting where the CBN delivered a 150bps hike in the key MPR rate and more importantly a 500bps increase in the CRR to 32.5%, liquidity conditions across the banking system have generally thinned out. This is evident […]

The Week That Was (September 12-16) Headline inflation clears 20%, but slowdown in m/m suggests peak in sight: The National Bureau of Statistics (NBS) published CPI data for August which showed that prices facing the average Nigerian climbed 20.52% on a y/y basis with renewed pressures in Food (+23.1% y/y) – a multi-decade high. Adjusted […]

The Week that was (September 6-10) 1-yr NTB paper hits 10%, the beginning of the end? In a surprise move, the DMO raised the stop-rate on the 1-year NTB tenor by 150bps to 10% (effective yield: 11.1%). Though markets have been tight and the DMO had relied on a helping hand from the CBN it […]