Five things to know to start your Tuesday

Savings bonds: DMO announces 2023 first offer

The Debt Management Office (DMO) on Monday announced its first savings bond issue for 2023. They are a 2-year FGN Savings Bond due January 11, 2025, and a 3-year FGN Savings Bond due January 11, 2026, both offered for subscription.

According to a statement by the DMO, the 2-year FGN Savings Bond offered an interest rate of 9.60 percent per annum, while the 3-year FGN Savings Bond is offered at an interest rate of 10.60 percent per annum.

The DMO said that the opening date would be January 3, the closing date would be January 6, and the settlement date would be January 11, while the coupon payment dates would be April 11, July 11, October 11, and January 11.

“They are offered at N1,000 per unit, subject to a minimum subscription of N5,000, and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

“Interest is payable quarterly while bullet repayment is at maturity,” it noted.

External reserves lost $3.43bn in 2022 – CBN

Official figures obtained from the Central Bank of Nigeria (CBN) showed that the external reserve lost $3.43 billion in 2022, owing primarily to a decline in oil production caused by leakages in the production system.

The CBN showed that the external reserve fell from $40.52 billion on December 31, 2021, to $37.09 billion on December 29, 2022.

Godwin Emefiele, the governor of the CBN, attributed the drop to falling revenue inflow to oil theft in the Niger Delta amid rising crude oil prices induced by the Russia-Ukraine war.

Emefiele advised during the CBN’s last Monetary Policy Committee (MPC) meeting that the bank sustain its current policies to boost non-oil exports in order to shore up its external reserves.

Microfinance Banks, major driving force for financial investments in 2022 – Expert

Abdulateef Husseni, the acting Managing Director of Egwafin Microfinance Bank, said on Monday that microfinance banks were the major driving force for financial investments in Nigeria in 2022.

According to the News Agency of Nigeria (NAN), Husseni made his observation based on the data from the National Bureau of Statistics (NBS), which recognised banks as the driving force for businesses, especially small and medium-scale enterprises in the country.

“Available information has shown that local industries depend on these financial institutions to the tune of about 60 percent of their financial investments, which now insure the economic development of the country.

“Microfinance banks in Nigeria recorded an 82 percent boost in lending, rising from N300.2 billion in 2019 to N546.6 billion in 2020. This is according to the latest data from the NBS.

“Also, an interesting observation to be made is the impact total lending has had on the private sector alone, as it increased by 18.5 percent (N5.58 trillion) year-on-year to N35.73 trillion in December 2021, up from N30.15 trillion in 2020,” he said.

Husseni said that microfinance institutions were the fuel that helped drive other sectors to success in 2022.

He argued that the increase in private sector lending was supported by the growth of the business activities of FinTech and technology-based companies.

Israel Central Bank becomes first to raise rates in 2023

The Central Bank of Israel (CBI) raised its benchmark interest rate by 50 basis points to 3.75 percent on Monday. This action not only signified the seventh time in a row it would be raising its interest rate, but also makes the European country the first this year to raise its interest rate.

The consequence of the bank’s action is that it pushes borrowing costs to their highest level since 2008 and in line with market forecasts.

The bank’s objective is to curb inflation that remains above 5 percent, the highest since October 2008.

According to Trading Economics, policymakers see the Israeli economy recording strong economic activity, accompanied by a tight labour market and an increase in the inflation environment.

Stronger dollar, IMF tougher 2023 projection pushes oil price downward

Oil prices lost some steam on Tuesday morning following a stronger dollar and the head of the International Monetary Fund’s (IMF) projection of a tougher 2023 as major economies experience weakening activity.

Brent crude futures dropped 98 cents, or 1.1 percent, to $84.93 a barrel by 0148 GMT, while U.S. West Texas Intermediate crude was at $79.49 a barrel, down 77 cents, or 1.0 percent, after the U.S. dollar strengthened.

According to Reuters, a stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies.

Moreover, Kristalina Georgieva, the Managing Director of the IMF, said on Sunday that the United States, Europe, and China—the main engines of global growth—are all slowing down simultaneously, making 2023 tougher than 2022 for the global economy.

Added to a stronger US dollar and the projection of slower economic activity in major economies, President Vladimir Putin’s ban on the supply of crude oil products starting from February 1 to nations that abide by the cap in a decree is most likely going to cause ripples in the price of crude oil.

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