The Bank maintained the monetary policy rate at 13.50 per cent in the period under review. Broad money supply (M3), on quarter-on-quarter basis, grew by 4.1 per cent to N36,478.13 billion at end-November 2019, compared with 0.4 per cent and 8.1 per cent increase at the end of third quarter 2019 and fourth quarter of 2018, respectively. The development reflected, wholly the 2.0 per cent increase in net foreign assets, which more than offset the 1.2 and 10.6 per cent decline in net domestic credit and other assets (net) of the banking system, respectively. Over the level at end-December 2018, broad money supply (M3) grew by 9.3 per cent at end-November 2019, compared with the growth of 5.1 and 16.4 per cent at end of third quarter 2019 and fourth quarter of 2018, respectively.
The growth in (M3) reflected, wholly, the 28.8 per cent increase in domestic credit (net), which more than offset the 22.8 per cent and 4.9 per cent decline in net foreign assets and other assets (net) of the banking system, respectively. Narrow money supply (M1), on quarter-on-quarter basis, fell by 1.7 per cent to N10,930.57 at end-November 2019, compared with the decline of 0.4 per cent at the end of third quarter 2019.
Developments in banks’ deposit rates were mixed, while lending rates trended downwards in the fourth quarter of 2019. With the exception of the average savings and 7 days deposit rates, which rose from 3.69 per cent and 3.23 per cent to 3.93 per cent and 3.30 per cent, respectively, all other deposit rates of various maturities, fell from a range of 8.23 – 10.29 per cent at end-September 2019 to a range of 7.93 – 9.92 per cent at end-December 2019. The average term deposit rate fell by 0.29 percentage point to 8.07 per cent at the end of the review quarter.
The weighted average prime lending and maximum lending rates fell by 0.35 percentage point and 1.2 percentage point to 14.99 per cent and 29.98 per cent at end-December 2019. Consequently, the spread between the weighted average term deposit and maximum lending rates narrowed by 0.91 percentage point to 21.91 percentage points at the end of the review quarter. Similarly, the margin between the average savings and maximum lending rates narrowed by 1.44 percentage point to 26.05 percentage points at end-December 2019.
The total value of money market assets outstanding in the fourth quarter of 2019 stood at N12.76 billion, showing an increase of 2.6 per cent, compared with the increase of 2.9 per cent at the end of the third quarter of 2019. The development was attributed, largely, to the 3.1 per cent increase in FGN Bonds outstanding during the review quarter. Developments on the Nigerian Stock Exchange (NGSE) were bearish.
Federally collected revenue in the fourth quarter of 2019, fell below both the provisional quarterly budget and receipts in the preceding quarter by 30.8 and 10.6 per cent, respectively. The development, was due, largely, to the shortfalls in receipts from both oil and non-oil revenue components in the review quarter.
Provisional Federal Government retained revenue in the review quarter was N938.72 billion, while total estimated expenditure amounted to N2,074.46 billion, resulting in an estimated deficit of N1,135.74 billion.
Agricultural activities in the review quarter were dominated by the harvest of cash and root crops. In the livestock sub-sector farmers engaged in the fattening of cattle and stocking of poultry in anticipation of the end of the year sales. The end-period headline inflation, on year-on-year basis for the fourth quarter of 2019, stood at 11.98 per cent.
Foreign exchange inflow, through the CBN, rose by 6.1 per cent, while outflow fell by 3.9 per cent, relative to their levels in the third quarter of 2019. Total non-oil export proceeds received by banks fell by 37.8 per cent, compared with the level at the end of third quarter 2019. The average naira exchange rate vis-Ã -vis the US dollar depreciated at the inter-bank, BDC segment, and the I&E Window. The average exchange rate at the ‘Investors’ and ‘Exporters’ window, the BDC and the Inter-bank segments of the market were N362.83/US$, N359.42/US$ and N306.95/US$, respectively, in the review quarter. At US$38.07 billion, the gross external reserves fell by 6.4 per cent, compared with the level at end of third quarter 2019.
World crude oil demand and supply were estimated at 100.95 mbd and 99.32 mbd, respectively, in the fourth quarter of 2019, compared with 100.63 mbd and 99.26 mbd demanded and supplied in the third quarter of 2019. Nigeria’s crude oil production, including condensates and natural gas liquids, was estimated at an average of 1.92 mbd in the review quarter, compared with 1.91 mbd in the preceding quarter. The average price of Nigeria’s reference crude, the Bonny Light (370 API), was US$64.87 per barrel in the fourth quarter of 2019, compared with US$64.25 per barrel in the third quarter of 2019. Movement in oil prices were driven, mainly, by optimism of a trade agreement between the US and China, as well as the improved outlook for global oil demand amid better-than-expected economic performance of some major economies in the review period.
Major international developments and meetings of importance to the domestic economy in the review quarter included: The meeting of the Ministers of Finance and Central Bank Governors Presidential Task Force on the ECOWAS Single Currency took place in Abuja, and a team from Moody’s Ratings Agency visited the CBN on November 7, 2019, as part of Nigeria’s 2019 Review of Sovereign Credit Rating Exercise from November 5 – 8, 2019.