CBN Financial Markets Dept Releases 2019 Activity Report

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Friday, November 06, 2020 / 11:59 AM / By CBN / Header Image Credit: Punch


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The 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.  

 

Despite 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).  

 

A 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.  

 

This 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 

 

This 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.  

 

The 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.

 

Download Full PDF Report 


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