Index to Nigerian Newspapers

The $2bn domestic FGN US dollar bond opening in Nigeria is expected to have a positive impact on the economy. The first series of $500m was announced at a hybrid roadshow in Lagos, attended by the Minister of Finance and Coordinating Minister of Economy, Wale Edun, and Director General of the Debt Management Office, Ms. Patience Oniha. The bond offering is targeted at pension funds, banks, Nigerians living in the country, foreigners living in the country, and Nigerians living in the diaspora. United Capital is the lead issuing house for the offering. Analysts predict that the offering will boost external reserves to help stabilize the Nigerian currency. The bond issuance holds promise to investors and the economy in several ways, such as providing an alternative, cheaper source to meet the government's financing needs and strengthening the naira. However, the tenor of five years seems ambitious, and a two-year, short-term tenor would have been better and less costly.

The naira has strengthened sharply in recent weeks, reaching one of its strongest levels in nearly two years, even as rising foreign portfolio inflows increase the risk of investor profit-taking later in the year, according to a macro update by CardinalStone.According to the report, the naira has witnessed a steep appreciation in the official market (+6.9 per cent year to date), reaching one of the strongest levels of the past two years (1,347.78/$ on Monday), which indicates improved liquidity conditions in the official foreign-exchange window.However, the spread between the official and parallel markets persisted, with the parallel market initially trading at about a 5.7 per cent premium before narrowing to roughly 3.2 per cent following renewed FX interventions by the Central Bank of Nigeria.It stated, “As such, we perceive that the CBN may be inclined towards holding the policy rate constant to signal its concern about liquidity risk while making an adjustment to the asymmetric corridor to align the SDF rate to OMO yields with a view to guarding the attractiveness of OMO and securing banks’ presence as key counterparties to investing FPIs. We see a 60.0 per cent probability of this view panning out and a 40.0 per cent probability of an indicative 50-100 bps rate cut.”