Economy
T-Bills Market Bearish as CBN Further Cuts Rate by 0.03%
By Dipo Olowookere
The average yields of treasury bills traded at the secondary market closed at 13.26 percent on Tuesday after increasing by 0.46 percent.
This was as negative sentiment at the market continued yesterday with yields rising across all maturities.
Business Post reports that the one-month paper appreciated by 0.45 percent, the 3-month note by 0.97 percent, the 6-month bill by 0.56 percent, the 9-month debt instrument by 0.19 percent and the 12-month paper by 0.14 percent.
At the market yesterday, the Central Bank of Nigeria (CBN) continued with its Open Market Operations (OMO) interventions.
The apex bank offered N150 billion worth of the OMO bills for sale and after receiving subscriptions valued at N177.91 billion from investors, eventually allotting N169.16 billion.
Two maturities were sold yesterday with N28.58 billion of the N50 billion worth of the 100-day bill allotted at 11.90 percent.
Of the N100 billion worth of 192-day paper auctioned, the apex bank received offers valued at N149.33 billion, but only N140.58 billion was allotted at 13.45 percent, lower than the rate of the previous session, which was 13.48 percent.
According to analysts at Zedcrest Research, “We expect the market to remain scantily traded as market players look forward to the possibility of a long tenor OMO offering on Thursday where we have N129 billion in maturing OMO bills.”
Meanwhile, rates in the money market further depreciated yesterday by 4.59 percent to close at 9.88 percent.
This was on the back of the 4.67 percent decline recorded by the Open Buy Back (OBB) and the 4.50 percent fall posted by the Overnight (OVN) rate.
However, the system liquidity remained moderately robust as a result of inflows from the Paris Club refunds and the Investors and Exporters (I&E) foreign exchange purchases by the central bank.
At the close of business, the OBB dropped to 9.33 percent from 14.00 percent, while the OVN rate went down to 10.42 percent from 14.92 percent.
Rates are anticipated to remain relatively stable today barring a significant OMO sale by the apex bank.
By Adedapo Adesanya
The Naira weakened against the United States Dollar by N4.75 or 0.35 per cent to N1,364.89/$1 from N1,360.14/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, August 11.
In the same vein, the domestic currency slumped against the Pound Sterling in the official market during the session by N4.11 to trade at N1,842.61 compared with the previous day’s N1,838.50/£1, and against the Euro, it lost N4.41 to sell at N1,575.50/€1 versus Monday’s N1,571.09/€1.
But it was a different scenario at the GTBank FX desk, where the Naira gained N4 against the US Dollar yesterday to close at N1,367/$1, in contrast to the previous day’s N1,371/$1, and appreciated by N5 in the parallel market to quote at N1,395/$1 compared with the preceding session’s N1,400/$1.
Interbank FX turnover, according to data from the Central Bank of Nigeria (CBN), fell sharply by 86 per cent to $29.1 million, down more than 86 per cent from $213.9 million a day earlier, with the number of settled interbank deals down to 47 from 182.
The decline in Dollar trading was attributed to weaker bank bids from customers seeking foreign exchange payments, while tight market liquidity continued to weigh on the Naira.
Nigeria’s gross external reserves rose by $83.81 million to $52.14 billion.
Meanwhile, the cryptocurrency market rebounded, with Dogecoin (DOGE) going up by 2.8 per cent to $0.0721 and taking its weekly gain to over 3 per cent, while Bitcoin (BTC) slipped by 0.3 per cent to $63,769.69.
Investors are focused on Thursday’s US Consumer Price Index (CPI) report and Middle East tensions, as lower inflation and a potential Fed pivot could fuel a relief rally in risk assets even as rising oil prices threaten to push inflation higher.
Binance Coin (BNB) grew by 2.2 per cent to $612.49, TRON (TRX) rose by 1.1 per cent to $0.3350, Ripple (XRP) increased by 0.9 per cent to $1.02, Ethereum (ETH) advanced by 0.8 per cent to $1,889.60, and Solana (SOL) jumped by 0.5 per cent to $76.24, while Cardano (ADA) lost 0.6 per cent to end at $0.1867, with the US Dollar Tether (USDT) and the US Dollar Coin (USDC) flat at $1.00 apiece.
By Adedapo Adesanya
Oil was up by 1 per cent on Tuesday as doubts about a potential United States-Iran peace deal fueled concerns that Middle East supply disruptions would persist.
As a result, Brent futures rose by $1.19 or 1.4 per cent to $88.91 a barrel, while the US West Texas Intermediate (WTI) futures expanded by $1.07 or 1.3 per cent to $83.20 per barrel.
Both contracts had jumped about 5 per cent on Monday as hopes for a peace deal between the US and Iran started to fade.
It looked worse on Tuesday when Iran said the Strait of Hormuz will remain closed unless the US ends the war and meets Iran’s conditions, raising the bar for a deal that would restore more oil traffic through the key waterway. About 20 per cent of global oil supply passed through the strait before the start of the Iran war on February 28.
Mr Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said it has also delivered additional conditions to the US through mediators.
US officials had suggested last week that negotiations involving Iran and Oman were making progress toward allowing more vessels through Hormuz.
Shipping traffic through the Strait of Hormuz fell sharply on Monday as tensions continued to disrupt maritime activity across the Middle East.
Shipping data showed that only six vessels passed through the strategic waterway on Monday, below the 10-day average of about 11 vessels. Before the conflict, daily traffic through the strait averaged between 125 and 140 vessels.
The disruption comes amid heightened security concerns across key regional shipping routes.
In the Bab el-Mandeb, Yemen’s Iran-aligned Houthis attacked a Saudi vessel carrying military equipment, according to the Houthi-run Saba news agency.
Separately, Reuters reported a missile attack on a container ship off Pakistan in what was suspected to be a US strike, further underscoring the security risks facing commercial shipping in the region.
The disruption to regional maritime traffic has also raised concerns about the recovery of oil production in the Middle East.
The US Energy Information Administration (EIA) said on Tuesday that some oil producers in the region could struggle to restore output to pre-conflict levels by the end of 2027, even if shipping and trade patterns return to normal by early next year.
The outlook highlights the potential for prolonged disruptions to global oil supplies despite a possible normalisation of trade flows in the coming months.
In Libya, a member of the Organisation of the Petroleum Exporting Countries (OPEC), renewed violence in the strategic city of Zawiya has disrupted the oil industry, with state oil firm the National Oil Corporation saying it could declare force majeure if drone attacks on energy assets in the city continued.
In Europe, the Ukrainian military said on Tuesday it attacked an oil refinery in the Russian city of Orsk, the second-largest city in the Orenburg region and an important industrial hub.
The combination of Ukraine’s attacks on Russian energy infrastructure and the Iran war has limited global supplies and boosted global energy prices.
By Aduragbemi Omiyale
African leaders have been advised to focus on economic integration through industrialisation, as this would make the continent a formidable force in the global market.
This charge was given by the Minister of State in the Tanzanian President’s Office responsible for Planning and Investment, Prof. Kitila A. Mkumbo, during a visit to the Dangote Petroleum Refinery and Petrochemicals in Lagos.
“Africa now needs economic liberation, and that can only come through industrialisation,” he said, describing Mr Aliko Dangote as Africa’s leading industrialist whose investments are increasingly extending beyond Nigeria to support development across the continent.
He added that Tanzania looks forward to working with Dangote Group as part of a broader vision of accelerating Pan-African industrialisation and strengthening regional manufacturing capacity.
The Minister also highlighted the importance of local refining capacity in improving Africa’s energy security, particularly in light of recent disruptions in global oil markets.
Referring to the impact of tensions around the Strait of Hormuz on global fuel prices, he said increased refining capacity from facilities such as the Dangote Petroleum Refinery would help cushion African economies against external shocks.
According to him, affordable and reliable energy remains one of the most important drivers of economic development, noting that expanded refining capacity across the continent would contribute significantly to lowering energy costs and improving the quality of life for millions of Africans.
The Tanzanian delegation was in Nigeria to follow up on discussions held earlier this year between President Samia Suluhu Hassan and Mr Dangote regarding the expansion of Dangote Group’s investment footprint in Tanzania.
The East African nation reaffirmed its commitment to deepening economic cooperation with Dangote Group, expressing strong interest in attracting new investments in fertiliser production, energy and industrial infrastructure to support the country’s long-term development agenda.
“We have come here to make a follow-up on what they deliberated with our President in terms of further Dangote investments in Tanzania,” Mr Mkumbo said.
