The Nigerian Stock Exchange All-Share Index (NSE-ASI) staged a rally last week (see Model Equity Portfolio), reflecting optimism. Part of that optimism came from market speculation, later confirmed, of a deal between the US, OPEC and Russia to reduce oil production. But oil prices have barely rallied and Brent crude, at US$32.12/bbl, is well short …

Nigeria needs help to tide it through the coronavirus lock-down. Without the kind of financial penetration and large government of developed countries, it is very difficult for it to inject liquidity into its financial system effectively. In fact, the crisis underlines the limited size of the Nigerian government and of central bank resources. Therefore help …

Last week the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its Monetary Policy Rate (MPR) at 13.50%, thus becoming one of the few central banks in the world not to signal (and the MPR is to some extent a signal – see the actual market rates listed on this page) …

The Central Bank of Nigeria (CBN) last Friday changed the rate in the principal foreign exchange markets by 3.6% in US dollar terms. This looks like a swift adjustment to the pressures in the markets and suggests flexibility. When it comes to the Monetary Policy Rate (MPR) to be decided by the CBN’s Monetary Policy …

The VIX Index, a US index of volatility, stands at its highest level since the global financial crash of 2008. Volatility is not the same thing as risk, but volatility can cause risk if global investors head towards safe assets (e.g. US bonds) and do not wish to refinance comparatively risky assets in emerging markets. …

We began this year with the view that the Naira / US dollar exchange rate could hold for most of 2020. When the coronavirus outbreak became apparent at the end of January we still believed that a combination of monetary stimulus in developed markets and foreign portfolio investment into Nigeria would stabilise the risk outlook. …

Since last July the Central Bank of Nigeria (CBN) has pursued non-conventional monetary policies (see Coronation Research, Year Ahead 2020, 16 January) which have seen credit grow and domestic risk-free rates fall well below the level of inflation. There are risks the Naira/US dollar exchange rate here (see below) but the CBN could claim that …

January started so well: February is another matter. Nigeria’s stock market was the world’s best-performing in January, foreign money flowed into its fixed-income instruments. Then came the coronavirus, fears over global growth and a sharp drop in oil prices. There is no reason to panic, in our view, but it is necessary to keep a …

What are the open market operation (OMO) bills of the Central Bank of Nigeria (CBN) for? And who are they for? We received some new answers last week. The OMO market is much larger than a liquidity management system might require, and serves as a means for foreign investors to enjoy Naira interest rates. Last …

If a surging stock market and falling risk-free rates are signs of optimism, then we can be optimistic about Nigerian markets this year. Indeed, the Central Bank of Nigeria (CBN) might congratulate itself on its bold policy experiments last year. We temper our enthusiasm by observing that T-bill rates are well below the rate of …