Stability expected to return to Nigeria’s fixed income market - CNBC Africa

Stability expected to return to Nigeria’s fixed income market

Western Africa

by Dara Rhodes 0

Nigerian Naira being counted in an exchange office in Lagos, Nigeria.

“With the maturities we have going forward, I project that we should see rates hovering around 12 to 15 per cent levels coming from a significant high of 65 per cent levels,” Kingsley Okereke, treasury fixed income dealer at Diamond Bank told CNBC Africa on Wednesday.

The liquidity cycles in the interbank markets are also estimated to ease up, as it has been significantly high in the past few weeks.

Following weeks of bearishness and the US Federal Reserve announcement on tapering,  value is expected to be added to the naira as good appreciations have been seen in past trading sessions.

Furthermore, Central Bank of Nigeria governor Sanusi Lamido Sanusi said that he will defend the naira not at so much cost but at a good level where stability is expected to be seen.


“I think the worst is over and the MPC’s decision has further supported that,” said Okereke.

As the Us Federal Reserve has decided not to taper, and with the Monetary Policy Committee (MPC)  leaving rates stable, naira levels should be sustained and under less pressure.

“The CBN support has been good to boost confidence, knowing that foreign investors have a key eye on our market,” Okereke added.

A  sharp naira movement across board on most bonds, especially the most active bonds, was recorded the day after the US Federal Reserve decided not to taper. There has been an uptrend in prices since the announcement.

“It slowed down on Monday as people were just waiting to see the MPC outcome, but now that that’s over, we should have more key interest. Confidence levels seem to be high and so, it’s an uphill swing from now,” said Okereke.

This is expected to continue until the next MPC meeting. Investors will however stay cautious of market reaction..

“You will see good volumes, you will see good significant trade coming in. I don’t think there is anything to fear. The worst is over so the market is on a bullish trend going forward,” said Okereke.