Overview

November inflation came in at 34.60% y/y. We expect further monetary policy tightening from the CBN and market yields to remain elevated. Meanwhile, the FX market is starting to gain some stability.

Market liquidity remained tight, driven by the CBN's aggressive Open Market Operations (OMO), which conducted a record 25 OMO auctions during the year. Treasury yields rose significantly, with stop rates for 364-day T-bills hitting 22.90% and 365-day OMO bills reaching 23.95%, reflecting heightened investor demand for real returns.

In the equities market, the Nigerian Stock Exchange rebounded with a 5.56% gain in December, closing the year with a 37.65% YTD return. Sectors like Insurance and Oil & Gas led the rally, supported by strong performances from MTN Nigeria and Aradel Holdings, which offset declines in BUA Cement and Dangote Sugar. Brent Crude prices also rose slightly to $74.64 per barrel, supported by geopolitical tensions and improved demand projections for 2025.

The Naira appreciated by 8.74% m/m in December, buoyed by the CBN’s introduction of the Electronic Foreign Exchange Matching System (EFEMS) and increased access for Bureau de Change operators. These measures brought some stability to the FX market, though a total annual depreciation of 41.03% underscores persistent pressures.

Explore the full report for an in-depth analysis of these trends, their implications for 2025, and actionable strategies for navigating Nigeria's evolving economic landscape.

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