Last week, Fitch noted significant fiscal and monetary reforms undertaken by Nigeria over the past year to stabilise the macroeconomic environment and enhance policy coherence and credibility. Despite these efforts, Nigeria faces substantial challenges in debt management. Fitch highlighted the critical importance of the ongoing Foreign Exchange (FX) reforms in boosting Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). Gaimin Nonyane, Director of Sovereigns at Fitch, emphasised that while Nigeria’s increased oil refining capacity will strengthen its Current Account (CA), FX reforms are essential for attracting foreign investments.
Furthermore, there is anticipation of a reduction in Nigeria’s debt costs, though they will still be considerably high, according to analysts. To address rising debt costs, Nigeria has implemented measures such as securitizing Central Bank overdrafts, reducing Central Bank financing, and enacting revenue mobilisation and tax reforms.
OMO and NTBs auctions conducted last week saw the CBN and DMO issue a total of ₦797.37bn at both auctions (₦518.95bn at the OMO auction and ₦278.42bn at the NTB auction). The interbank market was short ₦90bn on Friday morning and is expected to remain short opening today.
Nigeria has struggled with extensive inflationary pressures, attributed to reform policies and structural economic issues. Despite recent interest rate hikes, the country’s real interest rates remain negative, but tight monetary policy is forecasted to curb inflation if sustained. It is noteworthy to mention that Nigeria has made momentous strides with its exchange rate reforms. The disparity between the official and parallel market exchange rates has narrowed, signaling improved market confidence.
In other news, the Nigerian workers’ unions went on strike sometime last week over the federal government’s failure to implement their recommendations for a new national minimum wage. Over the past year, Nigerians have faced escalating prices due to the removal of the fuel subsidy, significant exchange rate depreciation, and imported inflation from rising global commodity prices.
For many, Nigeria’s April inflation rate of 33.7% doesn’t fully capture the reality, as the prices of goods and services, especially food, have more than doubled in the past year. However, it’s important to note that inflation is a global phenomenon, and many countries are experiencing similar challenges, although it is starting to slow down in some countries.
Tuesday, June 4, 2024, saw a remarkable surge in FX turnover, reaching $236.99 million, marking an impressive 94.46% increase. This notable spike emphasise a substantial uptick in market activity, indicative of heightened demand for the US dollar and intensified transactions within the foreign exchange market. On Friday, June 7, the NAFEM Closing Rate from FMDQ was $/₦1,483.99
Although the Central Bank of Nigeria (CBN) has upheld a stringent monetary policy stance to address inflation and stabilise the naira, the continuous demand for foreign exchange and ensuing pressure on the Naira present significant challenges to these endeavours.
On Tuesday, with liquidity long by over ₦300 billion, the CBN issued ₦250 billion worth of OMO bills. The auction featured the 105-day, 189-day, and 357-day tenors respectively. The OMO auction recorded a little over ₦500 billion in subscriptions across all three (3) tenors. At the end of the OMO auction, the 105-day tenor closed at 18.7400%, the 189-
day closed at 19.5900% and the 357-day closed at 22.3300%. In contrast to the last auction where there was no stop rate for the 90-day benchmark, the 174-day closed at 19.6400% and the 363-day closed at 22.3400%. Notably, the stop rate for the 182-day benchmark fell by 0.05% (5 basis points). On the flip side, the 364-day benchmark saw a slight increase of 0.01% (1 basis point).
The day after, we had the NTBs auction, and it featured the 91-day, 182-day, and 364-day tenors respectively – as usual. With a total offer of over ₦200 billion, and a total subscription of over ₦700 billion, there was a total allotment of almost ₦300 billion. When compared with the previous auction that had over ₦500 billion in allotment, there is a staggering difference of about ₦200 billion. At the end of the auction, the 91-day benchmark had the same stop rate as the previous auction which closed at 16.5000% while the 182-day had a stop rate of 17.5000%, reflecting a 0.051% (5.1 basis points) increase from the previous stop rate which closed at 17.4490%. However, the 364-day tenor had a stop rate of 20.6700% which is a 2 basis points decrease from the previous stop rate.
Despite the substantial MPR hike in recent times, analysts are of the opinion that the impact on the NTBs auction rates appeared muted compared to previous hikes. One key reason for this could be the increased appetite for rates at current levels, as evidenced by the total subscription of over ₦700 billion against an offer of over ₦200 billion. This oversubscription likely cushioned the impact of the MPR hike, preventing a significant rise in primary market rates.
After constantly considering and evaluating the trends for Bitcoin and Ethereum in a long while, it is worthy to take a sneak peek at other cryptocurrency-related subjects. This week, our focus is aimed at trends such as Airdrops, Notcoin and $Davido
An airdrop is usually a reward distributed to people who have participated in a crypto currency project by testing out the block chain, game or buying and holding NFTs (non-fungible tokens) as the case may be. Technically, people are directly and indirectly
employed to test the strength of a block chain, the security, loop holes, scalability to see how many people and kinds of devices are able to connect to and use the application.
Pavel Durov, one of the founders of Telegram, released a game in November of 2023. This game was the first of its kind on Telegram where over 35 million players (also Telegram users) would tap away on the coin icon to gather points. This game also had a bot that would tap away while you are offline. NOTCOIN is built on the TON (The Open Network) block chain and TON is used as gas fees on this chain.
These points were later converted to 1000 points = 1 $NOT. For example, users who had gathered around 30 million points automatically became holders of 30,000 $NOT. The coins (airdrop) were then distributed to users worldwide. As at the time of writing this article, the price of $NOT is approximately $0.024. Players who did not sell off immediately it was listed, and are still holding their 30,000 coins, will have roughly $720 as the worth of their notcoin holdings.
What do you do with your phone time? Do you engage in activities that can actively and legally reward you? There is so much knowledge and opportunity online. Do your own research and key into it, but do so in accordance with the set laws of your location.
Recently, there was a meltdown on X (formerly known as Twitter) over the coin $DAVIDO which was posted through the verified handle of the artist with the same name. Upon research, we have discovered that there is no white paper for this coin and that is a RED FLAG.
A crypto project/coin must have a white paper that details what the currency is about, the problems it solves, and/or at least the real-life use case. While this coin has gathered considerable momentum over the last week, $DAVIDO will need more than just hype to push this project forward or it will eventually fall flat on its face when it gets rugged by the largest holders.
At the time of writing this article, there are 14,091 holders of $DAVIDO. Only 2 wallets hold above $100,000 each and their combined holdings total approximately $264,000 with overall liquidity of $282,000. This red flag is ‘blood red!’
DYOR: Do Your Own Research, always to be sure that you are obeying the set rules and regulations of your location in accordance with cryptocurrency matters. Marina Times will not be responsible for any decisions that you make.
NOTE: Please, be informed that nothing in this article serves as financial advice, it is purely for analysis and awareness purposes.
In a recent oil production survey by Reuters for the month of May, Nigeria emerged with a notable increase, adding 50 thousand barrels to its daily crude oil output. Joining in, Iraq
also contributed an additional 50 thousand barrels to the mix, while Saudi Arabia, the oil powerhouse, saw a marginal increase. However, Algeria fell short of its production quota for the month.
Iraq, despite its earlier commitment to reduce production, defied expectations as the second-largest producer in OPEC, experiencing an unexpected flow in output. This development comes amidst pledges from both Iraq and fellow OPEC+ member Kazakhstan to balance earlier overproduction through further cutbacks throughout 2024.
Drawing from shipping data and industry insiders, the survey unveiled that the Organisation of the Petroleum Exporting Countries (OPEC) pumped out 26.63 million barrels per day (bpd) in May, marking a rise of 145,000 bpd from April. Surpassing its implied target by roughly 250,000 bpd for the nine members adhering to supply cut agreements, Iraq was the main contributor to this surplus production.
In response to economic uncertainties and heightened competition from non-member sources, OPEC+ members initiated fresh cuts in January. At the latest Joint Ministerial Monitoring Committee (JMMC) meeting, they agreed to extend these cuts through the third quarter, setting production quotas for 2025 and other resolutions.
Nigeria’s designated production quota has remained unchanged since November, signaling stability following the cartel’s deliberations on 2024 production levels. Over this period, Nigeria’s proposed output quota ascended from 1.38 million barrels per day to its present level.
With no major auctions coming up this week in the Nigerian financial markets, we expect the markets will be slow with gradual drop in yields. On the FX, fluctuations in price is expected to continue barring any major inflows to the economy.
On the international market following the better-than-expected US job reports, expectation for a rate cut by the Feds in July has been shifted to September. The ECB and Bank of Canada have been the first of major Central Banks to cut rates. We sincerely wonder if it is too soon to warm up for the rate cutting season.
