The Nation Newspaper

Tag: cbn

  • Discount Houses’ assets, liabilities rise 20% to N187b

    Discount Houses’ assets, liabilities rise 20% to N187b

    The  total assets and liabilities of discount houses stood at N187 billion in October, showing an increase of 20.4 per cent above the level at end-September last year, a Central Bank of Nigeria (CBN) report on the subsector has shown.

    The development was accounted for, largely, by the 43.5 and 24.9 per cent rise in claims on banks and claims on the Federal Government, respectively.

    Correspondingly, the increase in total liabilities was attributed, largely, to the 66.4 and 29.5 per cent rise in borrowings and money-at-call, respectively.

    It said discount houses’ investment in Federal Government securities of less than 91-day maturity rose to N69.0 billion and accounted for 45.7 per cent of their total liabilities.

    At that level, discount houses’ investment in Nigeria Treasury Bills rose by 31.1 per cent above the level at the end of the preceding month.

    Thus, investment in Federal Government securities was 14.3 percentage points below the prescribed minimum level of 60 per cent. Total borrowing and amount owed by the discount houses was N58.4 billion, while their capital and reserves amounted to N28.6 billion.

    CBN data indicated that growth in the key monetary aggregate contracted in October 2014. On month-on-month basis, broad money (M2) fell by 1.5 per cent, in contrast to the growth of 2.7 per cent in the preceding month.

    The development reflected the 9.1 per cent fall in foreign asset net of the banking system, which more than offset the effects of the 0.9 and 4.1 per cent growth in domestic credit (net) and other assets (net) of the banking system, respectively.

    Similarly, narrow money supply (M1) declined by 1.5 per cent below the level at the end of the preceding month due to the 4.6 and 0.7 per cent fall in its currency and demand deposit components, respectively. Over the level at end-December 2013, however, M2 grew by 4.2 per cent. Reserve money (RM) rose by 4.0 per cent at the end of the review month and was below the quarterly benchmark.

    Available data indicated mixed developments in banks deposit and lending rates during the review month. The seven- day and 12-month deposit rate fell from 4.54 and 9.31 per cent to 4.43 and 9.23 per cent, respectively, while the average savings deposit rate remained at 3.43 per cent same as in the preceding month.

  • CBN, IOCs’ $600m sales lift naira

    CBN, IOCs’ $600m sales lift naira

    The naira advanced the most since November 2003 as the Central Bank of Nigeria (CBN) and International Oil Companies (IOCs) increased sale of foreign exchange.

    The naira rose 3.8 per cent to 179.55 per dollar. The naira appreciated 2.2 per cent this year, the most among 24 African currencies tracked by Bloomberg after the Somali shilling.

    The CBN sold $451 million at its auction on Wednesday, the most since November 26.

    Oil companies offered about $200 million between January 5 and 7, according to Adebayo Omogoroye at Guaranty Trust Bank Plc.

    “There’s a lot more supply and demand is very thin. The central bank was very strong in the auction,”Omogoroye, head of trading at the Lagos-based lender, said by phone.

    Buyers have been put off after a CBN announcement in December forcing them to use foreign exchange within 48 hours or sell it back to the institution. Demand was also hit by a ruling that banks clear foreign-exchange positions daily, having previously been allowed net-open positions of 1 percent of shareholder funds.

    The CBN is reviewing this, its Governor Godwin Emefiele told Bloomberg. His comments have helped to boost liquidity, according to Robert Hagenaars, a fixed-income trader at Zenith Bank U.K. Ltd.

    “Interbank market activity is picking up, with investor confidence incrementally rising due to strong indications that the central bank will reconsider” the zero net-open position limit, Hagenaars said in a note.

    The naira fell 13 percent last year as falling oil prices battered Nigeria, which relies on crude for almost all export earnings and 70 per cent of government revenue. Brent crude futures fell 0.1 per cent to $51.11 yesterday.

  • CBN’s policy ‘ll increase cost, say operators

    CBN’s policy ‘ll increase cost, say operators

    The Central Bank of Nigeria (CBN) policy on funding of imported telecommunation and allied gadgets through the interbank foreign exchange (Forex) market has drawn the ire of the some operators.

    Accourding to MTN’s Customers Service Executive Akinwale Goodluck, the policy would hurt operators.

    Goodluck who is also  the Vice Chairman of Association of Licensed Telecoms Operators of Nigeria (ALTON), argued that going through the interbank foreign exchange (forex) market will add between six and seven per cent to costs. He spoke during a public forum organised by the Nigerian Communications Commission (NCC) in L:agos.

    About 80 per cent of the Global System of Mobile Telecommunication (GSM) cell sites across the country are being powered by generators as major source of power while power from the national grid is stand by. Generators, IT equipment and telecoms equipment are among the items the CBN prohibited their direct importation except via interbank forex market.

    In a circular the apex bank issued to all authorised dealers last December, CBN Director, Trade & Exchange Department, O.I. Gbadamosi, informed stakeholders that the policy was to maintain the existing stability in the forex market and strengthen the various policy measures already initiated by the CBN.

    “The importation of electronics, finished products, information technology, generators, telecommunication equipment, and invisible transactions importations shall henceforth be limited to the interbank market only,” he said.

    According to the NCC, there are about 29,000 base transmission stations (BTS) across the country, but the regulator said the nation would require between 70,000 and 80,000 BTS to facilitate seamless telephony in the country.

    This implies that the telcos would continue to build BTS, which would inevitably run on generators because the privatisation of the power sector has not brought any appreciable succour to the country as most 80 per cent of the BTS are still run on diesel.

  • CBN rules out capital controls despite naira slide

    CBN rules out capital controls despite naira slide

    The Central Bank of Nigeria (CBN) said it will not introduce capital controls, rather, it is reviewing a rule introduced last month that investors said crushed liquidity in the foreign exchange market, its Governor, Godwin Emefiele has said.

    According to Bloomberg, the naira has been battered by oil prices that have dropped more than 50 per cent since June. The naira depreciated almost 11 per cent in the past three months, the highest among 24 African currencies tracked by Bloomberg.

    The CBN last month told banks to clear foreign exchange positions daily, having previously allowed them net-open positions of one percent of shareholder funds, in a bid to bolster the currency.

    “There will be a review in due course. But I can tell you categorically it will no longer be one per cent. It will be less than one per cent. The reason we put a stop to one per cent is because we felt that it was too large to be held by banks as a trading position.

    “The CBN has no plans to change a rule adopted around the same time that dollars bought in the interbank market be used within 48 hours or sold to the regulator. The naira is “currently appropriately priced” and no new measures are being considered,”the CBN chief told Bloomberg.

    The currency weakened for a third day, declining 0.2 per cent to trade at 184.23 per dollar in Lagos.

    “We are satisfied with the current adjustment that’s been done. It remains a free entry and free exit market,” Emefiele said.

    Nigeria, which gets 70 per cent of government revenue and almost all export earnings from oil, has proposed spending cuts and in November raised interest rates 100 basis points to a record 13 per cent in a bid to stem capital outflows and defend the naira.

    The CBN on November 25 also moved the naira’s official peg for twice-weekly auctions to a midpoint of 168 per dollar from 155 and widened its trading band to five per cent either side from three per cent.

    The measures implemented by the regulator have made it difficult for foreign investors to exit their holdings, Samir Gadio, head of African strategy at Standard Chartered Plc, said.

    “There’s a risk that these measures last as long as the CBN feels it doesn’t have the ability to control the exchange rate,” he said.

    “That is news to me that foreign investors are unable to exit their positions. If any foreign investor needs to exit its position, he should make a demand to a bank. If the bank cannot find those dollars to buy in the interbank market, the central bank will provide the dollars,” he said.

  • CBN: bailout loans fell from N130.6b to N23.8b in one month

    CBN: bailout loans fell from N130.6b to N23.8b in one month

    The Central Bank of Nigeria (CBN) bailout loans to banks  dropped in October to N23.86 billion from N130.69 billion in September.

    The decline, CBN said, reflected the liquidity condition in the market during the review month. The fund, which came as Standing Lending Facilities (SLFs), showed that average daily request stood at N4.77 billion compared with the N7.69 billion in September. The interest received during the period was N9.15 million, compared with N67.53 million in September.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets.The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

    According to the CBN, daily aggregate request for Standing Deposit Facility ranged from N115.59 billion to N524.78 billion. The total deposits stood at N5.75 trillion compared with N6.75 trillion in the preceding month.

    This culminated in a daily average of N338.49 billion for the 17 business days in the period. Total interest paid during the review period amounted to N2.40 billion, compared with N2.60 billion interests paid in September, it said.

    Further data from the apex bank showed that lenders’total assets and liabilities amounted to N26.3 trillion, representing a 1.5 per cent increase above the level at the end of the preceding month.

    The regulator explained that funds were sourced, mainly, from increased mobilisation of central government deposit, increase in unclassified and foreign liabilities, and reduction in foreign assets. The funds were used, largely, to increase claims on central government, claims on central bank and reduce time, savings and foreign currency deposits, and demand deposits.

    It said banks’ credit to the domestic economy fell marginally by 0.7 per cent to N13.8 trillion, compared with the level at the end of the preceding month. The development was attributed to the 3.9 per cent and 0.5 per cent decline in credit to the Federal Government and credit to the private sector, during the review month.

    Total specified liquid assets of the banks stood at N6.4 trillion, representing 37.0 per cent of their current liabilities. At that level, the liquidity ratio declined by 0.8 percentage point below the level in the preceding month,and was seven percentage points above the stipulated minimum ratio of 30 per cent.

    The loans-to-deposit ratio, at 62.8 per cent, was 2.9 percentage points above the level at the end of the preceding month, but was 17.2 percentage points below the prescribed maximum ratio of 80 per cent.

    “Provisional data indicated that total assets and liabilities of the discount houses stood at N187.0 billion at last October, showing an increase of 20.4 per cent above the level at last September. The development was accounted for, largely, by the 43.5 per cent and 24.9 per cent rise in claims on banks and claims on the Federal Government. Correspondingly, the increase in total liabilities was attributed, largely, to the 66.4 per cent and 29.5 per cent rise in borrowings and money-at-call,” it said.

    Also, discount houses’investment in Federal Government’s securities of less than 91-day maturity rose to N69.0 billion and accounted for 45.7 per cent of their total liabilities.

    At that level, discount houses’ investment in Nigeria Treasury Bills rose by 31.1 per cent above the level at the end of the preceding month. Thus, investment in Federal Government securities was 14.3 percentage points below the prescribed minimum level of 60.0 per cent.  Total borrowing and amount owed by the discount houses was N58.4 billion, while their capital and reserves amounted to N28.6 billion.

     

  • Foreign loans repayment crisis looms over naira devaluation

    Foreign loans repayment crisis looms over naira devaluation

    Companies with dollar-denominated foreign and domestic loans are in for a tougher period as depreciation in Nigerian currency and global strengthening of dollar raise a double-edged spiral cycle that may further weaken corporate earnings and returns.

    Following the continuing decline in global crude oil price, naira has suffered significant depreciation and is now trading substantially above the upper limits of the Central Bank of Nigeria (CBN)’s official band naira opens today at N198/$. Leading finance and investment research firm, Financial Derivatives Company (FDC) Limited, says naira may further depreciate at both the official and parallel markets, echoing sentiments by vast majority of analysts.

    According to FDC, Naira may shortly cross the N200/$ rate at the parallel market while it could stabilise at a fair value of between N180/$ and N195/$. At the official market, there could be further depreciation of between three to five per cent.

    The Central Bank of Nigeria (CBN) in late November had devalued the naira with official parity rate of N168/$ and a wider band of +-5 per cent as against the previous rate of N155 +-3 per cent. This indicated a new upper limit of N176/$ as against previous upper limit of N160/$.

    Nearly all banks have dollar-denominated loans including tier 11 capital and correspondent banking facilities among others. Several non-bank companies also have dollar-denominated loans, according to The Nation.

    Skye Bank has raised some $150 million tier 11 capital. Unity Bank has also raised $120 million Tier 11 capital. First Bank of Nigeria had raised $300 million in a subordinated Tier 11 capital issue in third quarter of 2013. The Tier 11 capital transaction had a seven-year maturity and is callable on the fifth year after the issuance date. It carried an initial coupon of 8.250 per cent on the nominal par amount, which resets at the call date to a new fixed rate without step-up until maturity. The Tier 11 capital treatment amortises over the last five years prior to maturity.

    Ecobank Transnational Incorporated (ETI) Plc, the holding company for Ecobank Nigeria and other subsidiaries, last week signed a loan facility agreement with the European Investment Bank (EIB). The dollar-denominated loan facility agreement involved $100 million and will have a tenor of seven year. Sterling Bank plans to raise tier 11 capital of another $200 million in the first quarter of this year. Shareholders of Union Bank of Nigeria (UBN) Plc mid last year approved a $750 million capital raising for the bank including dollar-based debt issues.

    The Nation’s investigation showed that several quoted companies have dollar-denominated loans, including syndicated loans. Latest audited reports and accounts of several companies indicated they have substantial dollar-based loans. For instance, International Breweries had drawn down $25.2 million out of a total syndicated loan of $62 million. It carried interest rate of Libor+1.9 per cent. More than half of Oando’s total loans were denominated in dollars. Oando Group’s total loans stood at N255 billion by the last audited report. Presco Plc, a palm oil plantation and processing company, has outstanding foreign loan of N2.02 billion. It had started the process of a rights issue to raised new equity funds from its shareholders to offset the foreign-denominated loan and restructure its balance sheet. This has however been slowed down by the downtrend at the stock market.

    Head, Africa Strategy, FICC Research, Standard Chartered Bank, Samir Gadio, said the depreciation could be negative for banks and other companies with foreign loan.

    “In principle, the weaker Naira will be negative for banks that have borrowed in foreign currency through the Eurobond, international loan and swap markets because of the higher US Dollar costs in servicing their external obligations,” Gadio said.

    He, however, noted that the depreciation of the Naira has been modest so far by global standards and as such there are no fears of any severe systemic issues in the banking sector at this stage.

    He added that that a significant proportion of the banks’ offshore borrowing is probably hedged against dollar receivables onshore, although not entirely as the dollar-based share of the banks’ loan book has increased in recent years.

    “Meanwhile, another concern is that bank loans to onshore petroleum companies may be affected by the sharp drop in the oil price,” Gadio pointed out.

    Head, research and investment advisory, Sterling Capital Markets, Sewa Wusu, said banks and other companies with dollar-based loans would face financing pressure as they will be required to source more Naira earnings to fund their dollar-based loans.

    “They will definitely face pressure on their earnings; it means they have to source more funds to meet up the funding requirements of their foreign-denominated loans. Tier 11 capital of banks are at a cost and the Naira depreciation will put further pressure on banks’ earnings,” Wusu.

    Wusu, an economist, said the CBN will have no choice but to further devalue the naira if the oil price continues to decline.

  • Banks’ total assets, liabilities hit N26tr

    Banks’ total assets, liabilities hit N26tr

    Banks’ total assets and liabilities amounted to   N26.3 trillion last October, representing a 1.5 per cent increase above the level at the end of the preceding month, a report by the Central Bank of Nigeria (CBN) said.

    It said funds were sourced, mainly from increased mobilisation of Federal Government deposit, increase in unclassified and foreign liabilities and reduction in foreign assets. The funds were used, largely, to increase claims on central government, central bank, reduce time savings and foreign currency deposits, and demand deposits.

    It said banks’ credit to the domestic economy fell marginally by 0.7 per cent to N13.8 trillion, compared with the level at the end of the preceding month. The development was attributed to the 3.9 and 0.5 per cent decline in credit to the Federal Government and credit to the private sector during the review month.

    Total specified liquid assets of the banks stood at N6.4 trillion, representing 37.0 per cent of their current liabilities. At that level, the liquidity ratio declined by 0.8 percentage point below the level in the preceding month, and was seven percentage points above the stipulated minimum ratio of 30 per cent.

    The loans-to-deposit ratio, at 62.8 per cent, was 2.9 percentage points above the level at the end of the preceding month, but was 17.2 percentage points below the prescribed maximum ratio of 80 per cent.

    “Provisional data indicated that total assets and liabilities of the discount houses stood at N187.0 billion at end-October 2014, showing an increase of 20.4 per cent above the level at end-September 2014. The development was accounted for, largely, by the 43.5 and 24.9 per cent rise in claims on banks and claims on the Federal Government, respectively. Correspondingly, the increase in total liabilities was attributed, largely, to the 66.4 and 29.5 per cent rise in borrowings and money-at-call, respectively,” the report said.

    Also, discount houses’ investment in Federal Government securities of less than 91-day maturity rose to N69.0 billion and accounted for 45.7 per cent of their total liabilities.

    At that level, discount houses’ investment in Nigeria Treasury Bills rose by 31.1 per cent above the level at the end of the preceding month.

    Thus, investment in Federal Government securities was 14.3 percentage points below the prescribed minimum level of 60.0 per cent.  Total borrowing and amount owed by the discount houses was N58.4 billion, while their capital and reserves amounted to N28.6 billion.

     

  • Currency in circulation drops to N1.53tr

    Currency in circulation drops to N1.53tr

    The currency-in-circulation declined by 0.9 per cent, on month-on-month basis, to  N1.53 trillion in October, the Central Bank of Nigeria (CBN), has said.

    The apex bank which disclosed this report, said the figure, which is for October last year, contrasts the growth of 3.1 per cent recorded at the end of the preceding month.

    The development, relative to the preceding month reflected, largely, the 4.6 per cent fall, in its currency outside bank component.

    The CBN said total deposits at the end of the review month amounted to N6.9 trillion, indicating an increase of 4.2 per cent above the level at the end of the preceding month.

    It reflected largely, the 13.9 and 6.3 per cent rise in deposits of “Others” and banks, respectively. Of the total deposits, the percentage shares of the banks, Federal Government and “others” were 50.9, 44.2 and 4.9 per cent, respectively. Reserve money (RM) rose by four per cent to N5.07 trillion, reflecting the trends in bank deposits.

    Also, available data indicated that the money market rates were relatively stable during the review period.

    “The banking system was awash with liquidity surfeit, occasioned by maturing CBN bills, Cash Reserve Requirement (CRR) credit posting for the maintenance period, Joint Venture Cash (JVC) call and fiscal injections through statutory revenue released to the three tiers of government.

    “CBN bills of diverse tenors were floated at the Open Market Operations (OMO) segment to mop up the liquidity surfeit in the system. In the review month, Standing Deposit Facility (SDF) was more predominant as there was liquidity surfeit in the banking system. There was no request for repurchase transactions, same as in the previous month,” the report said.

    Provisional data indicated that the total value of money market assets outstanding in stood at N7.53 trillion, showing an increase of 2.2 per cent over the level in the preceding month. The development reflected the 1.8 and 2.7 per cent increase in outstanding Federal Government of Nigeria (FGN) bonds and Nigerian Treasury bills, respectively.

    Total deposits at the CBN at the end of the review month amounted to N6.9 trillion, indicating an increase of 4.2 per cent above the level at the end of the preceding month.

    The development reflected, largely, the 13.9 and 6.3 per cent rise in deposits of “Others” and banks, respectively. Of the total deposits, the percentage shares of the banks, Federal Government and “others” were 50.9, 44.2 and 4.9 per cent, respectively.

    Reserve money (RM) rose by 4.0 per cent to N5.07 trillion, at the end of the review month, reflecting the trends in bank deposits.

    The money market rates were relatively stable during the review period. The banking system was awash with liquidity surfeit, occasioned by maturing CBN bills, Cash Reserve Requirement (CRR) credit posting for the maintenance period, Joint Venture Cash (JVC) call and fiscal injections through statutory revenue released to the three tiers of government.

    CBN bills of diverse tenors were floated at the Open Market Operations (OMO) segment to mop up the liquidity surfeit in the system. In the review month, Standing Deposit Facility (SDF) was more predominant as there was liquidity surfeit in the banking system. There was no request for repurchase transactions, same as in the previous month.

  • CBN warns banks against loans to oil and gas, public sectors

    CBN warns banks against loans to oil and gas, public sectors

    Bankers have got a warning on the dire consequences of the falling oil price on loan advances to the oil and gas as well as the public sector.

    In a letter to all banks signed by Central Bank of Nigeria (CBN) Director, Banking Supervision, Mrs. Tokunbo Martins, the apex bank said the falling oil prices and the potential for a further decline had been a major concern.

    Many states have been unable to pay salaries as banks shut the tap amid dwindling and delayed allocations.

    Mrs. Martins said considering the quantum of exposure to the oil and gas sector, combined with risk management deficiencies revealed by the recent Risk Based Supervision, there is a need to proactively guard against a crystallisation of these risks.

    “The CBN therefore considers it essential to ensure that banks have sufficient capital buffers to mitigate these escalating risk taking activities. Where exposure to the oil and gas sector (as defined by the International Standard Industrial Classification of Economic Sectors as issued by the CBN) is in excess of 20 per cent of total credit facilities of a bank, the risk weight of the entire portfolio in the sector will attract weight of 125 per cent for the purpose of capital adequacy computation,” she said in the letter titled: “Oil and Gas Industry Credit Risk Mitigation”.

    Oil prices have declined from $107.89 per barrel in June to $85.06 per barrel in October, and trading at $57.33 per barrel. The possibility of further decline, Mrs. Martins said, should not be underestimated.

    The CBN director said that a proposed single-factor sensitivity stress test showed that at $70 per barrel, 25 per cent of oil sector loans would become non-performing while 15 per cent of the loans will be nonperforming in the public sector.

    At $65 per barrel, 40 per cent of oil and gas portfolio becomes non-performing and 30 per cent for public sector loans. Also at $60 per barrel, 55 per cent of oil loans become non-performing while 45 per cent of the loans become non-performing in the public sector.

    The test also showed that should oil price fall to $50 per barrel, 65 per cent of the portfolio would become nonperforming in the oil and gas sector, while it is 60 per cent for public sector loans.

    The single-factor sensitivity testing, Mrs. Martins said, is a form of stress testing that usually involves incremental change in a risk factor holding other risk factors content. “Shocks can be assumed to occur instantaneously, and it can be used as a simpler technique for assessing the impact of a change in risks when a quick response is needed. The focus of the sensitivity test is on transmission of crude oil price shock through deteriorating oil and gas, and public sector credit quality, resulting in elevated non-performing loan levels for the aggregate credit portfolio, and a requirement for additional prudential provisioning,” she said.

  • Banks’ loans to private sector hit N17tr, says CBN

    Banks’ loans to private sector hit N17tr, says CBN

    Credit to the private sector on month-on-month basis,grew marginally by 0.7 per cent to N17.7 trillion in October, according to a Central Bank of Nigeria (CBN) Economic Report.

    CBN said the figure compared with the growth of 1.5 per cent at the end of the preceding month. The development was attributed to the 5.2 per cent and 0.5 per cent increase in claims on states and local governments and the core private sector.

    Over the level at end-December 2013, banking system’s credit to the private sector grew by 7.7 per cent.

    Also, at N16.4 trillion, aggregate banking system credit (net) to the domestic economy grew by 0.9 per cent, on month-on-month basis, compared with the growth of 2.7 per cent at the end of the preceding month.

    “The development relative to the preceding month, reflected the growth of 0.9 per cent and 0.7 per cent in net claims on the Federal Government and on the private sector. Correspondingly,  the level of growth at end-December 2013, was 9.1 per cent,” it said.

    Banking system’s credit (net) to the Federal Government, on month-on-month basis, rose by 0.9 per cent to negative N1.3 trillion, compared with the growth of 10.4 per cent at the end of the preceding month.

    The report showed that foreign assets (net) of the banking system declined by N6.9 trillion, or 9.1 per cent, compared with the decline of 0.5 per cent and 0.3 per cent at the end of the preceding month and the corresponding month of 2013 respectively.

    The development relative to the preceding month, was attributed to the decline of the 17.6 and 7.3 per cent in foreign asset holdings of commercial banks and the CBN, respectively.

    Over the level at end-December 2013, NFA declined by 18.7 per cent. The decline was attributed to the fall of 32.5 per cent and 15.4 per cent in the foreign asset holdings of both the commercial banks and the CBN, respectively.

    Other assets (net) of the banking system, on a month-on-month basis, rose by 4.1 per cent to negative N7 trillion, compared with the growth of 0.7 per cent and 4.5 per cent at the end of the preceding month and corresponding month of 2013, respectively. Over the level at end-December 2013, other assets (net) of the banking system grew by 11.2 per cent.

    Available data indicated that the money market rates were relatively stable during the review period. The banking system was awash with liquidity surfeit, occasioned by maturing Central Bank of Nigeria (CBN) bills, Cash Reserve Requirement (CRR) credit posting for the maintenance period, Joint Venture Cash (JVC) call and fiscal injections through statutory revenue released to the three tiers of government.

    Also CBN bills of diverse tenors were floated at the Open Market Operations (OMO) segment to mop up the liquidity surfeit in the system. In the review month, Standing Deposit Facility (SDF) was more predominant as there was liquidity surfeit in the banking system. There was no request for repurchase transactions, same as in the previous month.

    Provisional data indicated that the total value of money market assets outstanding in October 2014, stood at N7.5 trillion, indicating an increase of 2.2 per cent over the level in the preceding month. The development reflected the 1.8 per cent  and 2.7 per cent increase in outstanding FGN bonds and Nigerian Treasury bills, respectively.

    Provisional data indicated that growth in the key monetary aggregate contracted in October 2014. On month-on-month basis, broad money (M2) fell by 1.5 per cent, in contrast to the growth of 2.7 per cent in the preceding month. The development reflected the 9.1 per cent fall in foreign asset net of the banking system, which more than offset the effects of the 0.9 and 4.1 per cent growth in domestic credit (net) and other assets (net) of the banking system, respectively.

    Similarly, narrow money supply (M1) declined by 1.5 per cent below the level at the end of the preceding month due to the 4.6 and 0.7 per cent fall in its currency and demand deposit components, respectively. Over the level at end-December 2013, however, M2 grew by 4.2 per cent. Reserve money (RM) rose by 4.0 per cent at the end of the review month and was below the quarterly benchmark.