Overview

As had been the case in September, October saw the Central Bank of Nigeria taking liquidity out of the financial system through auctions of T-bills and other instruments. Market interest rates rose, both in the T-bill market and the FGN bond market. We expect rates to remain elevated going forward. The reduction in Naira liquidity occasioned by the CBN did not prevent deprecation of the Naira in the foreign exchange market. Here demand was seasonally strong. All the same, the parallel rate traded within 5.0% of the official, NAFEM, rate which was encouraging.

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