Financial market update

30 October 2012, Sweetcrude, Lagos – Local and international financial market update.
Nigeria – An analysis of foreign exchange data from the CBN has revealed that Nigeria spent a total of N1.2trillion ($7.74 billion) on imports in the second quarter of 2012. A breakdown of the spending shows that N360billion represents 30% which went into the importation of oil. Industrial items gulped 25% which is about N300billion. Food took N252 billion, representing 21% and N180 billion was spent on manufactured products. About 24% of the total amount spent was for visible imports.

India – India’s central bank cut lenders reserve requirements to back a policy to revamp by the government aimed at reviving growth while leaving interest rates unchanged to fight price pressures. Cash reserve ratio was reduced to 4.25% from 4.5% adding about Rs175 billion.

China – The yuan exchange rate against the USD was little changed halting a rally that drove the currency to a 19 year high after the central bank weakened the currency’s reference rate. The PBOC set the yuan’s fixing 0.06% lower at 6.3028 per USD.

Japan – bank of Japan said it will offer unlimited loans at low interest rates to lenders to try to boost credit demand among companies and households. The money will be for terms of up to four years and based on the overnight call rate currently at 0.1%. This move was alongside a JPY 11 trillion expansion of the central bank’s main easing tool, its asset purchase program. Japan is turning to a wider array of unconventional tools for monetary easing as the global slowdown, waning into auto sales and a dispute with China set back an economy that remains mired in deflation.

Bonds – Quiet session on Monday with not much movement across the curve.

Bills – The short dated bills, tenors below 91 days was the focus of trading activity on Monday. Demand is quite week after numerous OMO auctions as well as the primary last week which has filled a lot of market participants.

Money Market – OBB and unsecured O/N rates at 12.00% & 12.50% to close Monday.

Indicative Currency Exchange Rates
                          Bid             Offer
EURUSD        1.2923          1.2933
GBPUSD        1.6047          1.6057
USDJPY         79.48            79.88
USDCHF        0.9350         0.9370
GBPEUR        1.2417           1.2427
USDZAR        8.6530          8.7530
USDNGN       156.95           157.45
JPYNGN         1.9747           2.0247
CHFNGN       167.86           171.86
EURNGN       202.83          206.83
GBPNGN        251.86          255.86
ZARNGN        18.14             20.14

Brent on the ICE Futures Europe exchange in Lond was much as USD24.31 a barrel more expensive that WTI on the New York Mercantile exchange on Monday. The widest
since Oct 14, 2011.

Interest rates
NIBOR (%)                      LIBOR (%)
O/N               12.2083         USD 1 month            0.2120
7 Day             12.9583         USD 2 month            0.2605
30 Day          14.8333         USD 3 month            0.3128
60 Day          15.5417          USD 4 month            0.3801
90 Day          16.0417         USD 6 month            0.5429
USD 12 month          0.8775
Y/Y Consumer Inflation September 2012 :          11.3%
FX Reserves: 23 October 2012 (USD bn)             42.27
MPR                                                                              12.00%
Source: Reuters Guardian, Bloomberg, Central Bank of Nigeria,
Financial Market Dealers Association Standard Chartered Bank Nigeria

                            Hi                Low          Close       Prev.Close
USD/NGN  157.22/32    156.78/88   156.95/05   157.23/33

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