03 April 2017, Sweetcrude, Lagos — The local and financial market products and services update.
NIGERIA: Nigeria’s forex reserves fell to a two-week low and the naira eased on the black market on Friday after the central bank pledged to step up dollar sales but also said it would announce a new currency rate for retail exchange bureaus next week. The central bank on Tuesday set a rate of 362 naira for exchange bureaus to sell the U.S. currency to consumers, an 11 percent rise in the local currency from the last setting in January. The bank, which opposes a free naira float, has been selling the U.S. currency on the official market to try to narrow the spread with the black market rate, which was quoted at a record low of 520 per dollar a month ago. On Friday the black market naira, which has firmed 17 percent since last month due to central bank dollar sales on the official market aimed at narrowing the spread, eased 1.8 percent to 390 naira, Thomson Reuters data showed. The naira held its level at 306.35 to the dollar after the central bank sold $1.5 million on the spot market.
FX: This week we expect some action on the CBN objective to narrow the gap between the parallel and official market. The CBN also altered the FX auctions criteria with Banks with larger Share holders funds having more allocations.
FIXED INCOME: Extremely quiet day on Friday. It was as if the trading restriction applied to bonds also. Not expecting much activity in bonds until after the release of the Q2 calendar. O/N closed at 11.50%. N25.054bn of 342 day bills was sold at the OMO. Stop rate was unchanged.
UK: The U.K. economy has defied expectations since the referendum but as the two-year negotiation with the EU begins, a number of headwinds are on the horizon. Growth is likely to slow as surging inflation squeezes household real incomes and uncertainty over future trade arrangements with the EU reduces the incentive to invest. The Bank of England is likely to look through inflation overshooting its target and keep policy unchanged until after the country has left the EU in 2019.
US: The next recession likely remains well into the future. While the economic cycle has entered its eighth year, it still does not display late-cycle characteristics, such as significant wage pressures, high inflation or elevated interest rates. Domestic sectors, primarily centered around personal consumption, continue to spur economic growth.
COMMODITIES: Futures topped $50 a barrel in New York on March 30 for the first time in three weeks after Kuwait Oil Minister, Issam Almarzooq reiterated support for prolonging the production-cut deal by OPEC and its allies beyond June. Prices advanced the prior day when government data showed that U.S. refineries boosted the amount of crude they processed by the most in almost three years and stockpiles grew less than expected. WTI, the U.S. benchmark crude, slipped 2.2 percent to $48.37 a barrel in the report week, and traded at $50.54 as of 9:43 a.m. London time on Monday.
Macro Economic Indicators
Inflation rate (Y-o-Y) for February 2017, 17.78%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Mar 30, 2017, 30.297
Money Market Highlights
NIBOR (%)
O/N 11.7083
30 Day 16.7221
90 Day 20.9258
180 Day 23.2750
LIBOR (%)
USD 1 Month 0.95111
USD 2 Months 1.02500
USD 3 Months 1.14956
USD 6 Months 1.42322
USD 12 Months 1.72400
Benchmark yields
Tenor Maturity Yield (%)
91d 22-Jun-17 19.01
182d 21-Sep-17 20.16
364d 22-Mar-18 22.47
2y 29-Jun-19 15.80
3y 13-Feb-20 15.77
5y 15-Jul-21 15.90
Indicative Currency Exchange Rates
Bid Offer
USDNGN 314.50 315.00
EURUSD 1.0553 1.0755
GBPUSD 1.2419 1.2621
USDJPY 111.36 111.39
USDCHF 0.99795 1.0081
GBPEUR 1.1649 1.1853
USDZAR 13.4972 13.7006
JPYNGN 2.6997 2.8003
CHFNGN 304.86 306.55