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DMO Okays FGN Savings Bonds For Transactions

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The Debt Management Office (DMO) listed two savings bonds of the Federal Government of Nigeria (FGN) in July with an offer price of N1,000 per unit.

The first offering will be a two-year FGN savings bond, due July 12, 2025, with an interest rate of 9.07% per annum, according to a statement from the DMO on Monday.

The second issuance is this 3-year FGN Savings Bond, due July 12, 2026, at an interest rate of 10.070 per annum. Both offers have a start date of July 3, a close date of July 7, and a settlement date of July 13.

Coupon payment date is October. January 12th, January 12th, April 12th, July 12th. The minimum subscription is 5,000 Naira, then in multiples of 1,000 Naira, with a maximum subscription of 5,000 Naira.

Interest payments will be made quarterly and lump sum payments (principal) will be made on the due date,” the DMO said. It states that they are backed by the full trust and credit of the Nigerian federal government and bear the general wealth of Nigeria. FGN Bonds are considered securities that can be invested by a trustee under the Trustee Investment Act. They qualify as government securities under corporate income tax laws and income tax laws for tax exemptions for pension funds and other investors.

 

“They are listed on the Nigerian Exchange Limited and are considered liquid assets in the bank’s liquidity ratio calculations,” it said.

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Naira Appreciates To ₦‎1,280/$ At Parallel Market

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The naira, on Friday, appreciated to N1,280 per dollar at the parallel section of the foreign exchange (FX) market.

The current FX rate signifies a 5.19 percent appreciation from the N1,350/$ reported on March 27.

Currency traders in Lagos, also known as bureau de change (BDCs) operators, quoted the buying rate of the greenback at N1,260 and the selling price at N1,280 — leaving a profit margin of N20.

“The price of the dollar as well as other major currencies have been falling. It is affecting our business as some customers prefer to keep their currencies than change it with us,” a currency trader identified as Aliyu told TheCable.

 

At the official section of the FX market, the local currency depreciated by 0.69 percent to N1,309.39/$ on March 28 — from N1,300.43/$ on March 27.

Meanwhile, the Central Bank of Nigeria (CBN), on March 29, said the economy recorded over $1.5 billion in foreign exchange (FX) inflow this month, indicating its monetary policy initiatives are effective.

The apex bank said the naira is headed in the right direction, and the administration of Yemi Cardoso, CBN governor, remains committed to ensuring the stability of the market and the appropriate pricing of the naira against other major currencies worldwide.

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Inflation To Fall In 2024 — CBN

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The Central Bank of Nigeria’s governor Yemi Cardoso expects headline inflation to fall to 21.4 per cent in 2024.

The apex bank’s governor disclosed this during his keynote speech at the launching of the Nigerian Economic Summit Group macroeconomic outlook report for 2024.

He said, “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent.”

 

According to him, the inflation targeting will help the government in its battle against inflation which hit 28.9 per cent in December. Lower rates will ultimately affect businesses, he alluded.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lower policy rates, stimulating investment, fueling growth, and creating job opportunities,” Cardoso said.

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