Global Macroeconomic Review
The U.S. saw soft labor growth but strong GDP, prompting a 25bps Fed cut as inflation stayed above target. The U.K. faces sticky inflation and weak labor demand, keeping the Bank Rate at 4.0%. The ECB paused rates, upgraded GDP forecasts, and inflation stabilizes. In Asia, India leads with 7.8% GDP growth, while China slows and Japan remains fragile. Africa shows diverging paths: Nigeria cut rates to 27%, Kenya and Angola hold steady, South Africa sees easing inflation. Oil markets were stable amid oversupply, with Brent near $66–$67/bbl despite OPEC+ production increases…
Domestic Macroeconomic Review
MPC Cuts Rate After 5 Years Amid Growth and Easing Inflation
Nigeria’s GDP grew 4.23%y/y in Q2-2025, led by a 20.46%y/y surge in oil production (1.68mbpd) and resilient non-oil sectors. Inflation eased to 20.1% y/y in August, aided by moderating food and energy costs, though core inflation pressures persist. The MPC cut the MPR by 50bps to 27%, reduced CRR, and narrowed the policy corridor, signaling a dovish pivot. Private sector credit fell 2.2% in June amid tight lending, while M3 rose 3.65%, supporting FX stability. Crude theft dropped 90% since 2021, sustaining oil output, with Bonny Light trading near $73/bbl.
Market Update
The Naira appreciated 2.9% m/m to ₦1,487/USD, supported by CBN interventions, FX inflows, and a 75% CRR on non-TSA deposits; external reserves rose to $42.35bn. Interbank liquidity averaged ₦2.1tn, peaking at ₦6.6tn after the MPC cut MPR 50bps to 27% and reduced CRR to 45%, driving funding costs lower (OPR 25.97%, O/N 26.41%). NTB yields fell 87bps to 18.11%, while FGN bond yields eased 61bps to 16.33%, amid mixed-to-bullish demand. Eurobonds strengthened slightly, with mid-yield at 7.80%. The equities market rose 1.72% (NGX-ASI 142,710), led by Oil & Gas, Consumer and Industrial sectors, despite profit-taking in Banking and Insurance.
