Weekly Market Insights: Global Trends and Local Implications
- Average net system liquidity increased sharply by over 80% week-on-week, driven by inflows from maturing securities, FAAC-related 13% derivation payments to oilproducing states, and CRR refunds to banks.
- Liquidity inflows are expected to remain elevated, with an estimated N2.98 trillion projected from maturities this week.
- OMO maturities account for roughly 63% of total projected inflows, and the market impact will depend largely on reinvestment behaviour and liquidity management actions by the CBN.
- Market conditions improved broadly, reflected in softer interbank rates, a firmer naira, rising oil prices, and positive equity performance, alongside selective easing in fixed-income yields.
- Oil prices remain supported around $70 per barrel amid ongoing U.S.–Iran geopolitical tensions, sustaining support for oil-linked FX inflows.
- BDC participation in the NFEM expands the formal FX market by increasing authorized participants, enhancing market depth, improving liquidity distribution, and strengthening price discovery.
