THE Federal Ministry of Agriculture and Rural Development and the Central Bank of Nigeria (CBN), have unfolded plans to develop effective marketing infrastructure for agricultural commodities.
The initiative is aimed at providing ready market for agricultural produce in the country.

Under this proposed scheme, government plans to rebuild rural infrastructure such as access roads and transportation, rural markets and extension services. Efforts are also being made to revive agricultural insurance and other inputs supply chain.
In a weekly summary of Federal Government securities performance for last week, investors sentiments for fixed income securities was aptly manifested with average bond yields trending upwards across all maturities for the week ending August 5, 2011 to reverse the decline in the preceding week.

Liquidity pressure at the inter-bank market coupled with CBN’s tight monetary stance may have triggered the uptrend in yields across all bond maturities. Access Bank Bond Index recorded a 1-week decline of 0.55% (vs. 1.52% growth two weeks ago) to close at 1,555.21 points. With liquidity tightness at the money market still prevalent, we expect average bond yields to continue the uptrend this week.

The Nigeria Interbank Offered Rate (NIBOR) inched slightly upward across all tenors for last week to reverse the downward trend observed the previous week. The increase in NIBOR was driven mainly by heightened liquidity pressure on the back of huge outflows of N97.9 billion and N222 billion for FX purchase at the CBN Wholesale Dutch Auction System (WDAS) and treasury bills, respectively.

The lagged effect of the recent hike in the monetary policy rate (MPR) may have also supported the uptrend in money market rates. While open buy back (OBB) rose from 6.89 per cent to 7 per cent, overnight placement and call rate rose from 7 per cent and 7.1 per cent to 7.25 per cent and 7.3 per cent, respectively.

A total of N114.9 billion in matured treasury bills hit the system this week, while about N100 billion for FX purchases and N105 billion in Nigerian National Petroleum Corporation (NNPC) withdrawals are expected to leave the system. Given the foregoing, rates are likely to inch further upward owing to expected pressure on market liquidity.