global economic growth remained subdued in 2019, due to significant slowdown in
trade and industrial production, occasioned by trade tensions between the
United States (US) and the People's Republic of China (PRC), uncertainties
surrounding BREXIT, geopolitical tensions in the Middle East and sluggish
growth in most emerging market and developing economies (EMDEs). These developments
affected, largely, financial market conditions.
the global risks and uncertainties, the Nigerian economy exceeded its 2018
performance, as well as expectations for 2019. The development was traceable
largely to the performance of the oil sector, and to a lesser extent, non-oil
sector especially agriculture and telecommunication/information services. The
financial markets continued to play an active role in capital formation and
intermediation, supported by effective implementation of various policies by
the Central Bank of Nigeria (CBN) as well as by the measures outlined in the
Federal Government of Nigeria (FGN) Economic Recovery and Growth Plan (ERGP).
policy measure that impacted on the financial markets was the downward review
of the Monetary Policy Rate (MPR) to 13.50 per cent from 14.00 per cent in
March 2019. However, the asymmetric corridor of +200/-500 basis points around
the MPR was maintained, while the Cash Reserve Requirement (CRR) and Liquidity
Ratio (LR) were also retained at 22.50 and 30.00 per cent respectively. In July
2019, the CBN directed that all deposit money banks (DMBs) attain 60.00 per
cent minimum Loan to Deposit Ratio (LDR), effective end-September 2019, and
reviewed the benchmark upward to 65.00 per cent at end-December. The policy on
the segregation of Open Market Operations (OMO) and Nigeria Treasury Bills
trades, which was released in October 2019, restricted the participation in OMO
trades by local corporates and individuals.
edition of the Financial Markets Department Activity Report presents the salient
developments in the financial markets and the proactive measures that the
Department took towards implementing monetary policy and achieving the price
stability objective of the CBN
Financial Markets Department 2019 Annual Activity Report is the tenth in the
series. It seeks to inform the public on the measures that the Department took
to implement the policy decisions by the CBN and its Monetary Policy Committee
towards achieving price and financial system stability.
report is structured into seven chapters. Chapter one provides an overview of
global and domestic developments and their impact on the financial markets,
while chapter two apprises the operations of the domestic money market. Chapter
three presents salient developments in the foreign exchange markets and chapter
four focuses on the capital market. FGN domestic debt issues, internal and
inter-agency committee activities are considered in chapters five and six,
respectively. Chapter seven presents major changes in the Nigerian financial
markets, while guidelines and circulars issued or revised in 2019 are tabulated
in the appendix for ease of reference.
I acknowledge the unflinching continued support and encouragement by the Management of the Central Bank of Nigeria, which have always provided the impetus that facilitate effective delivery of the Bank's mandate. I also commend the staff of the Department for their support, diligence and team spirit.