This year has seen a sizeable shift in funds from Money Market funds to Fixed Income funds. As we explain on page 2, the shift can be attributed to differences in yields, but this misses the important point about mark-tomarket values which lies at the core of the debate about implementing international reporting standards. 

FX 

Last week, the exchange rate at the Investors and Exporters Window (I&E Window) weakened by 0.19% to N415.10/US$1. Elsewhere, the Central Bank of Nigeria’s (CBN) foreign exchange (FX) reserves declined by -0.46% as CBN stepped up its interventions in the FX market. It appears that the interventions of the CBN in the I&E window and the restrictions on Bureaux de Change (BDC) operations have begun to yield positive results, resulting in the appreciation of the Naira in the parallel market by 4.26% to N540/1US$. FX turnover in the official market has been rising recently, contributing to stability in the I&E Window rate. Now that the CBN has brought more liquidity into the official FX markets we may see continued stability there and possibly a further easing of pressure on the parallel market rate. 

BONDS & T-BILLS 

Last week, activity in the Federal Government of Nigeria (FGN) bond secondary market was mixed as sell-offs at the mid-to-long segments of the curve were offset by buying activity at the short end. The average benchmark yield for bonds fell marginally (-1bp) to 11.30%. However, on benchmark notes, the yield of the 10-year (+2bps to 11.92%) and 7-year (+6bps to 11.68%) bonds expanded, while the yield on the 3-year bond (-4bps to 9.47%) declined. This week, at the November primary market auction, the Debt Management Office (DMO) is expected to offer N150bn (US$364.96m) across the January 2026, April 2037 and March 2050 bonds. We maintain our expectation that a future rise in bond yields is unlikely to be sharp as the DMO wishes to keep its debt service costs to a minimum.

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