26 October 2016, Sweetcrude, Lagos — Local and international financial market products and services update.
NIGERIA: The Federal Government will soon float a Diaspora bond to tap into the resources of Nigerians living abroad as one of the measures to overcome the recession, the Senior Special Assistant to the President on Diaspora and Foreign Affairs, Mrs. Abike Dabiri-Erewa, has said.
Dabiri-Erewa said this on Tuesday when she visited the Minister of Information and Culture, Alhaji Lai Mohammed, to seek for a working relationship with the ministry. She said looking to the Diaspora to overcome recession was not without precedent as Ireland also sought remittances from its citizens abroad when it was hit by the recession.
Dabiri-Erewa expressed confidence that with about $21bn being remitted to the country annually, Nigerians abroad were capable of pulling the country out of recession if they were adequately informed and engaged by the government.
FX: The interbank market remains muted and the CBN happens to be the major player. Traded range yesterday $/NGN 303.15 – 326.00.
FIXED INCOME: Second consecutive OMO auction for the week with N51.5bn mopped up. The CBN strategy of mopping up liquidity across two tenors remains unchanged. Stop rate remains 19.79% yield on the shorter dated bill (184-day) and 22.32% yield on the longer dated bill (338-day). Demand for bills and bond market dissipated yesterday with the bill market selling off more because of the persistent mop ups.
CHINA: China’s policy makers are stepping up efforts to rein in risks stemming from rampant growth in shadow banking products, elevated corporate debt and surging home prices.
A new ministry-level committee led by National Development and Reform Commission Chairman Xu Shaoshi will seek to ensure companies reduce leverage, according to a statement from the State Council, China’s cabinet. Separately, the central bank is conducting a trial monitoring of banks’ off-balance-sheet wealth management products under its macro-prudential assessment system, according to people familiar with the matter.
JAPAN: The Bank of Japan may drop references to its annual 80 trillion yen ($770 billion) target for government bond purchases from monetary policy statements in coming months, according to people familiar with discussions inside the central bank.
The key directive for staff charged with implementing the BOJ’s new policy framework is managing the yield curve for short-term and long-term borrowing costs, with the quantity of bond buying now clearly secondary to this, said the people, who asked not to be named because the talks are private.
COMMODITIES: Oil dropped for a third day after industry data showed U.S. crude stockpiles expanded as Russia said it preferred freezing output at current levels rather than cutting production.
Futures declined as much as 1.5% in New York after closing below $50 a barrel Tuesday for the first time in more than a week. U.S. crude inventories increased by 4.75 million barrels last week, the American Petroleum Institute was said to report. Energy Information Administration data Wednesday is forecast to show supplies rose. Output cuts are not an option for Russia, the nation’s envoy to OPEC said, according to Interfax.
Macro Economic Indicators
Inflation rate (Y-o-Y) for September 2016, 17.90%
Monetary Policy Rate current 14.00%
FX Reserves (Bn $) as at Oct 24,2016, 23.930
Money Market Highlights
30 Day 18.2397
90 Day 19.7521
180 Day 21.6925
USD 1 Month 0.5340
USD 2 Months 0.6688
USD 3 Months 0.8837
USD 6 Months 1.2557
USD 12 Months 1.06675
Tenor Maturity Yield (%)
91d 19-Jan-17 14.97
182d 20-Apr-17 17.55
364d 21-Sep-17 21.16
2y 30-May-18 18.66
3y 29-Jun-19 14.61
5y 15-Jul-21 14.91
Indicative Currency Exchange Rates
USDNGN 314.00 315.00
EURUSD 1.0820 1.1022
GBPUSD 1.2106 1.2308
USDJPY 104.25 104.08
USDCHF 0.98655 0.9967
GBPEUR 1.1075 1.1279
USDZAR 13.6590 13.8623
JPYNGN 3.0497 3.1503
CHFNGN 319.02 320.71
EURNGN 352.96 354.32
GBPNGN 400.35 401.75