Weekly Market Insights: Global Trends and Local Implications
- Average net system liquidity declined by 19% week-on-week, reflecting recent liquidity management operations.
- Liquidity inflows are expected to moderate this week, with an estimated N933.05 billion projected from maturities, barring additional inflows such as CRR refunds.
- Given the relatively modest inflow size, the impact on FX conditions is expected to remain limited in the near term.
- Interbank funding conditions tightened slightly, with the OVN rate edging higher in line with lower system liquidity levels.
- Financial markets remained broadly positive ahead of the MPC meeting, supported by improving sentiment across fixed income and equities.
- Oil prices rose to multi-month highs amid ongoing geopolitical tensions, providing continued support for Nigeria’s external position and FX outlook.
- BDC participation in the NFEM has improved FX market liquidity and supported rate convergence, with the gap between official and parallel market rates narrowing.
- At the close of the week, the official rate settled at N1,346.32/$, while the parallel market traded stronger at N1,335/$, reflecting improved price discovery and increased formal market participation.
