MPC Meeting: CBN Maintains A Dovish Stance Towards Market Keeping MPR Stable at The First MPC Meeting of The Year 

Naira Gains against the USD at the Bureau De Change, Parallel (“black”) Markets Brandspurng
Afolabi Sotunde Illustration Naira

The FGN bond market traded on a very calm note, although with a bearish tilt as market participants anticipated the outcome of the MPC meeting that was concluded today.

We saw local investors maintain their demand bias for short duration bonds, with emphasis on the 2024s and 2026s papers, which traded around 6.10% – 6.30% and 7.30% – 7.40%, respectively. We also saw little action on the 2045 bonds, with trades executed around 9.80% – 9.90%.

Consequently, yields expanded by an additional c.12bps D/D on the average across the benchmark curve.

We expect some buying interest to resume tomorrow in reaction to the CBN’s dovish stance at today’s MPC meeting. 

Treasury Bills

The Treasury Bills market continued on a bearish run despite the inflows from OMO maturities credited into the system today. Traders remained firmly offered on short and mid-dated bills at low yields, which was shunned by real buyers who preferred the longest-dated bills offered at attractive levels.

The January 2021 OMO bills remained the most sought-after T-bills, with the bulk of market trades executed around 3.40%- 3.70% levels during the trading session.

We expect market attention to turn towards the PMA NTB auction scheduled for tomorrow while market participants continue to cherry-pick on selected bills offered at attractive levels. 

Money Markets

System liquidity opened today with an estimated figure of +N250bn, as money market rates recoiled by an additional c. N113bps on average due to a reduced funding pressure at the market today. Consequently, OBB and OVN rates closed the day lower at 4.50% and 5.25%, respectively.

We expect funding rates to oscillate in tandem with the available system liquidity in the short term. 

Read Also:  Nigeria MPC maintains status quo at final meeting of the year

FX Market

Volumes traded in the I&E FX window went up by over 172% with over $108.34mio changing hands D/D, while the Naira appreciated by N0.50k to close at N394.00/$, with intraday rates ranging within a low of N390.00/$ and a high of N396.00/$. Likened to the I&EFX segments, the Naira also appreciated at the parallel market by N1.50K boosted by the FX supply from weekly collections by the BDCs from the Apex bank. 


It was a typical bearish session in the NIGERIA Sovereigns, with some profit-taking action seen, especially on the mid-and long-tenor papers causing yields to expand slightly by c.3bps on the average across the sovereign curve.

At the SSA space, the Angola 2025s remained weak for the second consecutive day as sellers continue to improve offers in another profit-taking driven session for the paper.

In contrast to the Sovereign papers, the NIGERIA Corps papers were bullish although still maintaining a tranquil trading session with significant movement seen on the Zenith 2022s paper, which declined by -c.40bps D/D.

Whilst proper and reasonable care has been taken in the preparation and accuracy of the facts and figures presented in this report, no responsibility or liability is accepted by Zedcrest Capital or its employees for any error, omission, or opinion expressed herein.

This report is not a piece of investment advice or a research recommendation and should not be regarded as such. The information provided herein is by no means intended to provide a sufficient basis on which to make an investment decision.