UPDATE 1-Nigeria's five-year bond yield sheds 200 bps after surprise rate cut -traders - REUTERS

MAY 29, 2020

(Adds details, background)

ABUJA, May 29 (Reuters) - Nigeria’s five-year bond yield dropped more than 200 basis points on Friday as yields fell across maturities, a day after the central bank unexpectedly cut its benchmark lending rate to stimulate growth in Africa’s largest economy, traders said.

The bank lowered its benchmark interest rate to 12.5% from 13.5%, on Thursday, triggering bond yields to fall.

The yield on the most liquid 5-year paper fell 201 basis points to 6.5% while the 2026 paper, a seven year bond, with six years to maturity, fell 120 basis points to yield 8.8% following the rate cut.

Traders said the rate cut spurred buying interest from domestic funds battling with excess liquidity on the money market which worsened after foreign investors dumped local treasuries due to a plunge in oil prices that was exacerbated by the coronavirus pandemic.

The central bank’s governor on Thursday said Nigeria’s economy, which grew 1.87% in the first quarter, could contract in the second and third quarters but recover in the fourth with the fiscal and monetary policy measures put in place by the authorities. (Reporting by Chijioke Ohuocha; Editing by Toby Chopra and Alexis Akwagyiram)


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics