CBN Responds to Global Economic Conditions; Depreciates Naira


March 21, 2020

Zedcrest Capital

Below are highlights of trading activities in the fixed income and forex market on March 20, 2020

FGN Bonds

Yields in the Bonds Markets continued its recovery, as bids improved across the curve. The most axes remained on the mid- (2028s & 2036s) to long-end (2049s), as excess funds from matured funds and coupon payments fostered continued cherry-picking of bonds by local players. Yields compressed by c.5bps across the benchmark bond curve.

With Bond PMA and MPC meeting scheduled next week, we anticipate a cautious approach by market players, as they await the outcome of both events, to determine potential market direction.

Benchmark FGN Bonds
Description Bid (%) Offer (%) Day Change (%)  
14.50 15-Jul-21 7.16 6.03 (1.16)  
16.39 27-Jan-22 9.15 6.71 (0.01)  
12.75 27-Apr-23 11.95 10.80 1.00  
14.20 14-Mar-24 12.88 11.02 0.16  
13.53 23-Mar-25 12.97 11.13 (0.28)  
12.50 22-Jan-26 13.24 12.49 0.24  
16.29 17-Mar-27 13.16 12.66 0.01  
13.98 23-Feb-28 13.10 12.70 (0.05)  
14.55 26-Apr-29 13.02 12.71 (0.55)  
12.15 18-Jul-34 13.41 12.45 0.01  
12.40 18-Mar-36 13.40 12.33 (0.01)  
16.2499 18-Apr-37 13.39 12.80 (0.01)  
14.80 26-Apr-49 13.42 12.94 0.02  

Treasury Bills

The Treasury Bills market ended the week on a slightly active note, as we saw segmented activity on OMO maturities. The short-end of the curve had the most demand pressure, as banks looked to the short-end to properly manage excess liquidity from yesterday’s OMO maturities. The long-end of the OMO curve (Jan-Mar 2021) was saturated with offers from offshore investors, but no bids to match, as banks were reluctant to reinvest at the long-end of the OMO curve. Yields expanded by an average of c.27bps across the benchmark OMO curve.

The NTB side continued to witness some slight sell-off, as local investors looked to other government-backed instruments, with the same duration but more attractive yields. Yields expanded by an average of c.308bps across the benchmark NTB curve.

We expect to see more supply from offshore investors, as they persistently look to offload their exposure in OMO bills.

Benchmark OMO Bills
Description Bid (%) Offer (%) Day Change (%)
NGOMO 2-Apr-20 18.00 10.00 0.00
NGOMO 14-May-20 18.00 10.00 0.00
NGOMO 4-Jun-20 18.00 10.00 0.00
NGOMO 2-Jul-20 18.00 10.00 0.00
NGOMO 13-Aug-20 18.00 10.00 0.00
NGOMO 3-Sep-20 18.00 11.00 0.50
NGOMO 1-Oct-20 18.00 11.00 0.50
NGOMO 3-Nov-20 18.00 11.00 0.50
NGOMO 1-Dec-20 18.00 11.00 0.50
NGOMO 5-Jan-21 18.00 15.40 0.50
NGOMO 02-Feb-21 18.00 10.00 0.50

Benchmark NTBills

Description Bid (%) Offer (%) Day Change (%)
NIGTB 2-Apr-20 3.00 1.50 0.30
NIGTB 2-Jul-20 3.50 1.00 (0.10)
NIGTB 1-Oct-20 4.00 1.00 (1.00)
NIGTB 12-Nov-20 5.00 2.00 (0.25)
NIGTB 14-Jan-21 5.50 3.00 (0.20)
NIGTB 11-Feb-21 6.00 2.00 0.00

 Money Market

Despite CRR debit of c.N70bn, interbank rates still remained depressed D/D, as rates dropped by c.40bps. OBB and OVN rates closed the week lower at 4.80% and 5.30% respectively, as system liquidity opened with c.N466bn positive.

We expect rates to slightly increase as debits from FX Wholesale and Retail dwarfs expected inflows from OMO maturities (c.N75bn) next week.

Money Market Rates
  Current (%) Previous (%)
Open Buy Back (OBB) 4.80 5.20
Overnight (O/N) 5.30 5.90

FX Market

At the Interbank, the Naira/USD spot and SMIS rates remained stable to close the week at N307.00/$ and N358.51/$ respectively. At the I&E FX window, the Naira further depreciated against the dollar by N1.65k to close at N372.00/$.

At the parallel market, cash rates depreciated by N1 to close at N376.00/$, while the transfer rate remained unchanged at N400.00/$.

Today, the CBN adjusted its exchanges rates to the different market segments as follows:

  1. IMTOS to Banks – N376/$
  2. Banks to CBN – N377/$
  • CBN to BDC – N378/$
  1. BDCs to End-users – Not more N380/$

*IMTOs -International Money Transfer Operators

In addition to the above, unofficial sources confirm the apex bank also changed the rate at the I&E window for Foreign Investors to N380/$.

FX Market
Current (N/$) Previous ( N/$)
CBN Spot 307.00 307.00
CBN SMIS 358.51 358.51
I&E FX Window 372.00 370.35
Cash Market 376.00 375.00
Transfer Market 400.00 400.00


The NGERIA Sovereign saw some much needed respite, as the yields recovered across the sovereign yield curve, With the U.S President firmly stating a possible intervention in the price war between Saudi Arabia and Russia, this sparked a sharp recovery in oil prices with a c.9.15% increment. Yields compressed by an average of c.97bps across the sovereign yield curve.

Similarly, the NGERIA Corps tickers traded on a bullish note, as yields strengthened among most tracked papers, with yields on the ACCESS 2021s having the biggest D/D drop of c.774bps.

Proshare Nigeria Pvt. Ltd.

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