Overview

August was a month of distinct gains in Naira fixed income markets, with yields on both Treasury bills and Naira-denominated FGN bonds moving sharply downwards. This marks a return to liquidity in the money market. This may reflect confidence on the part of the authorities, given that inflation registered a small decline in July (down 79bps m/m to 33.40%), removing the overriding concern to use system liquidity to control inflation. In the short term, we see liquidity staying high, though we question how easy it will be to bring inflation to heel once and for all

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