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Treasury Newsletter – February 11, 2022

Nigeria’s Investment Value Tracked for 2021 Rose to $23.3bn The total value of investment announcements tracked in Nigeria for the year 2021 was 23.30bn, representing...

Nigeria’s Investment Value Tracked for 2021 Rose to $23.3bn

The total value of investment announcements tracked in Nigeria for the year 2021 was 23.30bn, representing about 39% more than that of 2020, which was $16.74bn. Mr. Emeka Offor, Acting Executive Secretary/CEO of the Nigerian Investment Promotion Commission, NIPC, disclosed this at the Q1, 2022 media parley on investment promotion activities in the country.

Cash Reserve Ratio (CRR): What is it?

One of the core functions of a Central Bank, Central Bank of Nigeria (CBN) inclusive is to ensure stability of the financial market through the regulation of the activities financial institutions. For this purpose, Central Banks employ monetary policy instruments ranging from Liquidity ratio, interest rates, open market operations to cash reserve ratio (CRR) and so on.

Commodity Market

Ginger maintained a 3-week decline on the AFEX Exchange last week, the price of maize and cocoa plummeted marginally, while sorghum and cashew outperformed other commodities, increasing by 7.25% and 6.49% w-o-w (Week-On-Week) respectively. The open market demonstrated same price movement for maize, however, cocoa increased by 1.62%.

Treasury Bills

Last week, the Nigerian Treasury Bills (“NT-Bills”) secondary market took a marginal bearish turn. The week started on a quiet note and maintained minimal trading activities despite buoyant system liquidity (N512.3bn long as at Thursday). Consequently, average yield advanced 1bp W-o-W to close 4.15% from 4.14% the previous week. I

FGN Bonds

The bond secondary market traded on a quiet note as investors continued to trade cautiously last week while awaiting clarity on the direction of yields. As a result, average yield remained unchanged at 13.04%. Particularly, average yields on short-, medium-, and long-term maturities closed at 13.87%, 12.68% and 12.53% respectively.

FX Market

The exchange rate between the naira and the US dollar closed at N416/$1 at the Investors and Exporters (I&E) window, where forex is traded officially. Naira appreciated against the US dollar on Wednesday with a 0.16% gain to close at N416/$1 compared to N416.67/$1 recorded as of the close of trading activities on Tuesday, 8th February 2022. Also, forex turnover at the official market surged by 129.27% to $170.94 million.

 

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