Market News

• Naira appreciates across trades
• Forex reserves rise to $54.86b
• Equities rally N1.5tr gain
• N4.23tr demand for NTBs

The Nigerian financial system absorbed the first major cut in interest rate by the Central Bank of Nigeria (CBN) with a gush of optimism and resilience with key indicators showing measured optimism across the markets.

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The Monetary Policy Committee (MPC) of the CBN at the end of its two-day meeting 307th policy meeting had earlier in the week announced a major cut in the nation’s underlying interest rate benchmark, reducing the Monetary Policy Rate (MPR) by 350 basis points from 26.50 per cent to 23.00 per cent. It also adjusted the Standing Facilities Corridor around the MPR from +50 and -450 basis points to +50 and -300 basis points while holding other parameters unchanged.

The naira closed weekend stronger at N1,330.68 per dollar at the Nigerian Foreign Exchange Market (NFEM), representing appreciation of 0.1 per cent during the week.

In the forwards market, naira appreciated across all tenors by 0.2 per cent each. The one-month forward appreciated to N1,349.27 per dollar. The three-month trade closed at N1,386.17 per dollar while the six-month and one-year forwards improved to N1,438.33 per dollar and N1,541.80 per dollar respectively.

The nation’s external reserves increased by $136.76 million to $54.86 billion, underlining increasing inflows from multiple sources.

On the back of expectations of reduction in cost of fund, Nigerian equities rallied N1.5 trillion in net capital gains to close weekend with total market capitalisation of N163.655 trillion. The benchmark index for the Nigerian stock market, the All Share Index (ASI), rose by 0.92 per cent to push the country’s average year-to-date return to 62.01 per cent, one of the five highest returns globally.