Omodele Adigun
Deposits by public and private sectors as well as commercial banks with the Central Bank of Nigeria (CBN) swelled to N13.97 trillion within 30 days, just as currency-in-circulation inched up to N2.55 trillion.
According to the Economic Report just released by the apex bank, the shares of the Federal Government, banks and private sector deposits for the last month of the year stood at 45.7 per cent, 38.6 per cent and 15.7 per cent, respectively,
The report explained that reserve money rose by 6.4 per cent to N7.44 trillion with the upward movement in reserve money showing, mainly, the eight per cent increase in deposits of banks with the CBN. Currency-in-circulation, on month-on-month basis recorded 2.5 month per cent increase, growing to N2.55 trillion in contrast to the decline of 0.7 per cent at the end of the preceding month.
During the review period, the key financial market indicators remained relatively stable. Movements in domestic money market rates were influenced, largely by the level of liquidity arising from inflow, such as fiscal disbursements, maturing CBN bills and Federal Government securities and outflow from the sale of CBN bills, FGN securities and provisioning settlement for foreign exchange purchases.
The stability at the foreign exchange market could be attributed to the sustained intervention by the CBN.
In line with the bank’s tight monetary policy, excess liquidity, arising from maturing CBN bills and fiscal injections, was consistently mopped up through Open Market Operations (OMO) auctions. The impact of the new CBN directive on OMO auctions, had seen portfolio switch from the money market to the capital market, leading to a crash in treasury bill rates.
In the month under review, OMO auctions culminated in the withdrawal of N694.83 billion as at November 26, 2019 through the sale of CBN bills tenored at 82-364 days, with stop rates ranging from 11.5 per cent to 13.3 per cent. This represented a decrease of 60.9 per cent, compared with N1.77 trillion sold in October 2019.
The CBN report also showed that federally-collected revenue (gross) stood at N858.92 billion within the review period. This was below the monthly budget estimate and the receipts in October by 31.1 per cent and 3.9 per cent, respectively. Oil and non-oil receipts (gross), stood at N489.08 billion and N369.84 billion, in the review month, constituted 56.9 per cent and 43.1 per cent of total revenue, respectively.