The Monetary Policy Council (MPC) of the Central Bank of Nigeria (CBN) meets today and is due to deliver its verdict on its Monetary Policy Rate (MPR) tomorrow. We think that, after its surprising cut from 12.50% to 11.50% in September, it will leave the MPR on hold now. The CBN is happy with low …

As of Friday, the Nigerian Stock Exchange was the world’s best-performing equity market in local currency terms and its second-best performer in US dollar terms. The market was up 30.53% year-to-date in Naira and up 24.60% in US dollars (translating at the NAFEX rate). Since 6 April it rose by 69.51% in Naira terms. The …

The electoral victory of Joe Biden as the next President of the United States of America has positive consequences for Nigeria, we believe. He is likely to give Africa a much higher priority than his predecessor, and key staff have African experience. On the other hand, unlike his predecessor, he may be relaxed about low …

The Naira yields of T-bills and Federal Government of  Nigeria (FGN) bond are lower than its US dollar Eurobonds. This is highly unusual. See more below. FX Last week, the foreign exchange rate markets closed essentially flat, with the Naira depreciating by 0.05% against the US dollar to N385.95/US$1 in the NAFEX market (also known …

What will be the fiscal and monetary responses to the events of the last week? The monetary authorities are probably relieved that the equity market advanced last week; that there was a rally in the bond market; and that the exchange rate barely moved. There is no evidence that financial markets were alarmed. In most …

Which countries will be Africa’s winners and losers at the end of the Covid-19-induced recession? We believe it makes sense to a take a two-year view on this question so, when the International Monetary Fund (IMF) revised its GDP forecasts for 2020 and 2021 last week, we took the opportunity to combine them. The results …

During the two weeks to 9 October, the Nigerian Stock Exchange All-Share Index (NSE-ASI) rose by 7.96%, bringing its year-to-date return to 5.86%. To what can we attribute the popularity of equities during a recession? The answer, we believe, was the cut in the monetary policy rate on 22 September, signalling that we are not …

A year ago this month the Central Bank of Nigeria (CBN) banned most domestic institutions from buying new issues of its open market operation (OMO) bills. The result was an exodus of money from the OMO market into government bills and bonds, which has driven down rates without a break for coming up to one …

As we often write, Nigeria’s public finances – all the way from trade balances through to the Federal Government’s budget – work well when oil trades over US$50.00/bbl. We have seen some forecasts predict oil prices above US$50.00/bbl as early as Q4 this year, and indeed oil (in this case Brent) traded at around US$47.00/bbl …

The past three weeks have seen an unusual number of macroeconomic changes. The Central Bank of Nigeria (CBN) announced plans to clear the backlog of foreign currency demands and began supplying US dollars to the Bureaux de Change (BDC). Nigeria won an important High Court case in London. And oil prices fell. However, we don’t …