Average Money Market Rate Went Down By 1.65% To Settle At 2.57% From 4.22%

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Monday, July 15, 2019  / 01:45PM / By Anchoria AM Research/ Header Image Credit: Otap Projects

 

Money Market

The average money market rate went down by 1.65% to settle at 2.57% from 4.22% in the previous week due buoyant system liquidity seen during the week as CBN continued to hold off on the issuance of OMO.

The Open Buy Back (OBB) and Overnight rate (OVN) fell to 2.21% and 2.93% from 3.86% and 4.57% respectively in the previous week. Major inflow for the week included: OMO Maturity of cN184bn while major outflow included Weekly Wholesale, Invisible and SME FX auction of $210mn.

Barring the issuance of OMO this week, we expect the market to remain stable.

Instrument

05/07/2019

12/07/2019

Change

OBB

3.86%

2.21%

-1.65%

OVN

4.57%

2.93%

-1.64%

Source: Anchoria AM Research, FMDQ OTC

 

Forex: USD/NGN

The foreign market remained relatively stable last week as the CBN Official Rate rose marginally by 0.02% to close at N307.00/$ while the rate at I&E FX window fell by 0.01% to close at N360.79/$. The rate in the parallel market remained unchanged at N361.00/$.

On the average, market turnover closed at $107 million during the week from $232 billion in previous week. This represents c54% decrease in average market turnover as pressure reduced relatively in the FX market.

We expect rates in the parallel market to remain constant as the apex bank continues to supply FX into the market, coupled with its frequent Wholesale and Retail SMIS programme.

05/07/2019

12/07/2019

Change

CBN Official Rate

306.95

307.00

+0.02%

I&E FX Window

360.82

360.79

-0.01%

Everdon BDC Rate

361.00

361.00

+0.00%

Source: Anchoria AM Research, FMDQ OTC

 

Commodities

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Fixed Income

 

Bond: FGN

The Bond Market closed on a bullish note last week with yields compressing across most maturities. Average yields fell by 17bps to close the week at 13.64%. During the week, the market participant reacted positively to the revised guidelines on accessing the CBN Standing Deposit Facility (SDF) which capped the daily remunerable daily placements by bank at N2 billion.

Other factors that shaped the Bond Market last week include anticipation of release Q3 bond issuance calendar by the Debt Management Office

 

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

 

Treasury Bills

Following the release of the new guideline for the Standing Deposit Facility (SDF) which is pegged at daily deposit at N2 billion, this provided support for the system liquidity during the week. The secondary treasury bills market closed on a bullish note. The average yield fell by 80bps to close at 11.14% from 11.94% in the previous week

The T-bill Primary Market Auction is expected to hold on Wednesday, 17th July 2019.

Secondary Market

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Source: Anchoria AM Research, FMDQ OTC

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Anchoria Research: +234 908 720 6076;  research@anchoriaam.com


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