Last week several countries, including Nigeria, announced a gradually loosening of lock-down restrictions associated with the COVID-19 pandemic. A gradual return to normal life is planned because it is feared that a full resumption of normal life could lead to a renewed outbreak of infections. Meanwhile, several international newspapers report on the curiously low impact …

Last we noted that the Central Bank of Nigeria (CBN) is in no hurry to raise market interest rates and that – most of the time – Nigeria’s commercial banks are liquid, usually reporting over N500.0bn (US$1.3bn) in total closing balances. This situation is consistent with a pro-growth policy, and indeed all market interest rates …

The Federal Government of Nigeria (FGN) is proposing a revised budget for 2020 which is designed to generate a deficit in the region of N5.2 trillion (US$13.5 billion), up from the previous estimate of N2.2 trillion. Normally one would expect the prospect of rising government debt to spur interest rate rises. But there appears to …

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. …