The Debt Management Office (DMO) has announced the suspension of the FGN Savings Bond Offer, which was slated for the month of April 2020.
This was disclosed in a press statement that was released by the DMO on Monday, March 30, 2020 and seen by Nairametrics.
Recall that President Muhammadu Buhari, during a nationwide broadcast on the Coronavirus disease (COVID-19), yesterday announced restriction of movement and shut down of public and private institutions in the Federal Capital Territory (FCT), Lagos and Ogun States. The restriction of movement was based on the need to keep Nigerians safe and contain the spread of the coronavirus disease.
Part of the statement read, “The Debt Management Office (DMO) wishes to inform the general public that the FGN Savings Bond Offer for the month of April 2020, which was scheduled for April 6 – 10, 2020 has been suspended’’. ‘The DMO wishes to assure the general public that the FGN Savings Bond Offers will resume when the conditions change.”
However, the DMO noted that the suspension of the April 2020 Offer would not affect Coupon Payments due to investors for already issued FGN Securities, as arrangements had been made to ensure that all Coupon Payments for and redemptions of FGN Securities were made as and when due to investors’ designated accounts.
The DMO also said that it wished to use the opportunity to call on the general public to adhere strictly to Mr President’s directives and cooperate with relevant Government Agencies that are working assiduously to contain the spread of the Covid-19.
About FGN Savings Bonds: They are debt securities of the Federal Government and issued by the Debt Management office for and on behalf of the Federal Government. They have no default risk, which means that the repayment of the principal and interest is assured.
BREAKING: CBN reduces MPR to 12.50%, holds other metrics
Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 13.50% to 12.50% and retains CRR at 27.5%, Liquidity ratio at 30%.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) from 13.50% to 12.50%.
Governor, CBN, Godwin Emefiele, disclosed this while reading the communique at the end of the MPC meeting on Thursday in Abuja. Meanwhile, other parameters such as the Cash Reserve Ratio (CRR) remained at 27.5%, Liquidity ratio at 30%.
Details later …
Just in: Buhari seeks approval from green chamber to borrow fresh $5.5billion
Buhari, is also seeking the approval for the revised 2020-2022 mid-term expenditure framework (MTEF) which became necessary as a result of the crash in crude oil prices and the cut in the production output.
President Muhammadu Buhari is seeking the approval of the House of Representatives to borrow fund to finance capital projects at the federal and state (to support state governors) levels in the 2020 budget.
This request was disclosed via the official twitter handle of the House of Representatives.
The president’s letter, which indicated that the fund would be sourced locally and internationally, was read on the floor of the House of Representatives by the Speaker, Femi Gbajabiamila, during plenary on Thursday, May 28, 2020.
In the letter to the lower chamber, Buhari, is also seeking the approval for the revised 2020-2022 mid-term expenditure framework (MTEF) which became necessary as a result of the crash in crude oil prices and the cut in the production output.
Although the tweet did not contain the total amount of loan that is being requested, reports suggests that the President is seeking approval to borrow the sum of $5.513 billion from external sources to finance 2020 budget deficit and support state governments to meet challenges caused by the coronavirus pandemic.
President @Mbuhari is also seeking the House approval to borrow locally & internationally to finance capital projects as well as finance projects to support state governors in the 2020 budget
The letter was referred to the House Committee on loans & debt management. #HousePlenary
— House of Reps NGR (@HouseNGR) May 28, 2020
CBN’s MPC unlikely to cut rates, as Nigeria’s foreign reserves hit $36.16 billion
Note that Nigeria’s inflation could potentially rise to 14% by the end of the year due to a higher VAT and a weakened naira.
The CBN’s Monetary Policy Committee (MPC) is expected to leave the interest rate of 13.5% unchanged during its meeting later today.
The projection is coming on the heels of macroeconomic fundamentals released by the National Bureau of Statistics (NBS), which showed that inflation rose to 12.34%; its seventh consecutive monthly rise and highest level since April 2018.
Note that Nigeria’s inflation could potentially rise to 14% by the end of the year due to a higher VAT and a weakened naira. Therefore, in order to minimise the risk of exacerbating inflationary pressures, the CBN is unlikely to further cut rates. This possible outcome from the MPC meeting will help stimulate economic growth, just like it did in 2019.
Meanwhile, despite the foreign exchange liquidity crisis being experienced in the currency spot market, data obtained from CBN revealed that the country’s foreign exchange reserves have further increased to $36.16 billion (Gross Estimate) as of 28th of May, 2020.
The surge in Nigeria’s external reserves is due to the fact that the price of crude had gained more than 40% since the deadly COVID-19 pandemic started, coupled with reports that foreign investors are returning to Nigeria. The disbursement of $3.4 billion emergency facility by the International Monetary Fund (IMF) to CBN has also been a contributing factor.
Recall that the CBN Governor, Godwin Emefiele, had promised more liquidity in the currency market, assuring that all genuine dollar demands would be met.
However, an Interest rate expert, Ola Oladele, during a phone chat with Nairametrics, advised that the CBN should keep its word by boosting Nigeria’s Forex supply as the persistent downtrend in the currency black market continues. She said:
“The depreciation of the naira in the parallel market as a result of low supply of FX from official sources and less optimistic outlook on the economy due to falling oil prices.
“The BDCs haven’t received supply from official sources since our borders were closed and the crash in oil prices has made natural sellers of FX more cautious.
“We hope that the recent statements by the regulator will restore confidence and subsequently, supply to the market.”