At the end of its September policy meeting, the (Nigerian) Monetary Policy Committee (MPC) left key monetary policy rates unchanged in line with consensus expectations. 
Key consideration highlighted included the fragility of the recovery in the local economy, unrelenting pressure on price level and sustained uncertainties in the global economy, especially the recent US-Fed announcement to scale down on asset purchases as well as hike rates once more before year-end. Although the MPC maintained status quo, we highlight our observations as follows:
Although the MPC signaled its readiness to ease rates if need be in the near term, a November-2017 rate cut remains highly unlikely given that the MPC expressed concerns over the US-Fed action which is a threat to the fragile stability in the currency market.
Also worthy of note is the fact that the CBN is not guiding rate lower as purported by market participants but capitalising on outsized bids at the primary market auctions by offering lower rates. Accordingly, the recent reduction in yields had been broadly driven by panic purchases as dealers attempt to lock down returns ahead of a near-term rate cut.
In line with the foregoing, we maintain our view that the yield environment will remain broadly attractive till year-end amid a tight monetary stance.
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