2020 FINANCIAL MARKETS DEPARTMENT HALF YEAR ACTIVITY REPORT

CENTRAL BANK OF NIGERIA

FINANCIAL MARKETS DEPARTMENT

Half-Year Activity Report

2020

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Table of Contents

FOREWORD ……………………………………………………………………………………………………………………. IX

PREFACE …………………………………………………………………………………………………………………………. X

• 1.0 OVERVIEW …………………………………………………………………………………………………………….. 11

• 1.1 Global Economy ……………………………………………………………………………………………………….. 11

• 1.2 Domestic Economy ……………………………………………………………………………………………………. 13

• 1.3 Monetary Policy ……………………………………………………………………………………………………….. 14

• 1.4 Nigerian Financial Markets Operations ………………………………………………………………………… 15

  • 1.4.1 Money Market ………………………………………………………………………………………………….. 15

  • 1.4.2 Foreign Exchange Market ………………………………………………………………………………….. 15

  • 1.4.3 Capital Market Developments …………………………………………………………………………….. 16

  • 1.4.4 Federal Government Domestic Debt ……………………………………………………………………. 17

  • 1.4.5 Activities of Internal and Inter-Agency Committees ……………………………………………… 18

  • 1.4.6 Other Developments in the Nigerian Financial Markets …………………………………………. 18

  • 1.4.7 Guidelines and Circulars ……………………………………………………………………………………. 18

• 2.0 DOMESTIC MONEY MARKET OPERATIONS ………………………………………………………… 19

• 2.1 Liquidity Management ………………………………………………………………………………………………. 19

  • 2.1.1 Open Market Operations ……………………………………………………………………………………. 20

  • 2.1.2 Discount Window Operations …………………………………………………………………………….. 22

• 2.2 Inter-bank Funds Market ……………………………………………………………………………………………. 24

• 2.3 Interest Rates Movement ……………………………………………………………………………………………. 25

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• 2.5 One-Way Secondary Market Intervention …………………………………………………………………….. 27

• 3.0 FOREIGN EXCHANGE MARKET OPERATIONS …………………………………………………….. 28

• 3.1 Developments in the Foreign Exchange Market ……………………………………………………………. 28

• 3.2 Inter-bank Foreign Exchange Market …………………………………………………………………………… 28

• 3.3 Naira-Settled Over the Counter Foreign Exchange Futures …………………………………………….. 30

• 3.4 The Bilateral Currency Swap Agreement ……………………………………………………………………… 31

• 3.5 Investors and Exporters Window ………………………………………………………………………………… 31

• 3.6 Bureau-de-Change …………………………………………………………………………………………………….. 32

• 3.7 Interbank Foreign Exchange Rate ……………………………………………………………………………….. 32

• 3.8 Foreign Exchange Rate Premium ………………………………………………………………………………… 34

• 4.0 CAPITAL MARKET DEVELOPMENTS ……………………………………………………………………. 37

• 4.1 Nigerian Stock Market ……………………………………………………………………………………………….. 37

  • 4.1.1 All Share Index and Market Capitalization …………………………………………………………… 38

  • 4.1.2 Market Turnover ………………………………………………………………………………………………. 39

• 4.2 New and Supplementary Listings and Delisting ……………………………………………………………. 40

• 4.3 New Developments in the Capital Market ……………………………………………………………………. 40

4.3.1 The Implications of the Finance Act 2019 on the Nigerian Capital Market ………………. 40

4.3.2 The Launch of the NSE Growth Board ………………………………………………………………… 41

4.3.3 NG Clear- Central Clearing Counter-Party …………………………………………………………… 41

• 5.0 FEDERAL GOVERNMENT DOMESTIC DEBT ………………………………………………………… 43

• 5.1 Nigerian Treasury Bills ……………………………………………………………………………………………… 43

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5.1.1

Structure of Outstanding Nigerian Treasury Bills Holdings ……………………………………. 45

• 5.2 Federal Republic of Nigeria Treasury Bonds ………………………………………………………………… 45

• 5.3 Federal Government of Nigeria Bonds …………………………………………………………………………. 46

• 5.4 Domestic Debt Charge ……………………………………………………………………………………………….. 47

• 5.5 Over-the-Counter Transactions …………………………………………………………………………………… 47

  • 5.5.1 Over-the-Counter Transactions in Nigerian Treasury Bills …………………………………….. 47

  • 5.5.2 Over-the-Counter Transactions in Federal Government of Nigeria Bonds ……………….. 48

• 5.6 Asset Management Corporation of Nigeria Bonds …………………………………………………………. 48

• 5.7 Federal Government of Nigeria Savings Bonds …………………………………………………………….. 48

• 5.8 Federal Government of Nigeria Green Bonds ……………………………………………………………….. 49

• 5.9 Federal Government of Nigeria Sukuk …………………………………………………………………………. 49

• 5.10 Federal Government of Nigeria Promissory Notes …………………………………………………….. 49

• 6.0 ACTIVITIES OF INTERNAL AND INTER-AGENCY COMMITTEES ………………………… 50

• 6.1 Liquidity Assessment Group ………………………………………………………………………………………. 50

• 6.2 The Non-Interest Financial Institutions Products Development Committee ………………………. 50

• 6.3 Fiscal Liquidity Assessment Committee ………………………………………………………………………. 51

• 6.4 Financial Regulation Advisory Council of Experts ………………………………………………………… 51

• 7.0 MAJOR DEVELOPMENTS IN THE NIGERIAN FINANCIAL MARKETS ………………….. 52

• 7.1 Expansion of the Scope of Regional Banks …………………………………………………………………… 52

• 7.2 CBN Rule Book ………………………………………………………………………………………………………… 53

• 7.3 Extension of Deadlines for the Recapitalisation of Microfinance Banks and Insurance Companies 53

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Central Bank of Nigeria published this content on 17 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 February 2021 17:41:11 UTC.