Nigeria’s headline inflation rate eased for the fifth consecutive month, dropping to 20.12% in August 2025 from 21.88% in July, according to data released by the National Bureau of Statistics (NBS). On a month-on-month basis, inflation moderated to 0.74% in August, reflecting a slower pace of increase in the average price level compared to July. The NBS highlighted that the year-on-year headline inflation rate also declined relative to August 2024, with the twelve-month average inflation settling at 24.66%, a notable 6.6 percentage point decrease from 31.26% recorded in the same period last year. Food inflation, a key driver of headline inflation, slowed to 21.87% year-on-year in August from 37.52% in the corresponding period of 2024. On a month-on-month basis, food inflation decelerated sharply to 1.65% from 3.12% in July. The NBS attributed this decline to falling average prices of key staples such as imported and local rice, guinea corn flour, maize flour, millet, semolina, and soya milk. The twelve-month average food inflation stood at 25.75%, down from 36.99% recorded in August 2024, largely reflecting a favorable base effect. Core inflation, which excludes volatile agricultural products and energy, also moderated, printing at 20.33% in August 2025 from 27.58% in the same month last year. However, on a sequential basis, core inflation edged up to 1.43% from 0.97% in July. The twelve-month average core inflation was 23.04%, lower than 25.18% reported in August 2024. Overall, the sustained disinflation trend highlights the impact of a more favorable base year, moderating food prices, and easing cost pressures across urban and rural centers.
Money Market
System liquidity remained buoyant through the trading week, opening at ₦2.11 trillion on Monday and closing at ₦1.67 trillion on Friday driven by NTB auction outflow and swap payments. Week-on-week, the Open Buy Back (OBB) remained flat to close at 26.50%, while the Overnight (OVN) rates declined by 1bp to close at 26.95%.
We expect rate to continue to hover around this level, as we expect FAAC inflow, NTB maturity, and bond coupon to keep system liquidity at an elevated level.
Treasury Bills Market
The Treasury Bills market sustained a bullish tone through the week, with strong demand concentrated at the long end of the curve. The week opened with the September 3 bill quoted at 17.10/16.70, marking a sharp decline from earlier levels, and demand intensified ahead of the NTB auction where the DMO offered ₦290bn but received robust subscriptions of ₦1.59trn, eventually allotting only ₦345.10bn. Stop rates declined significantly, with the 91-day, 182-day, and 364-day bills closing lower at 32bps, 20bps, and 91bps respectively, with the 364-day bill settling at 16.78%. Following the auction, unmet demand filtered into the secondary market, driving further bullish sentiment as the newly issued September 17 bill was actively sought after at 15.90%, while the September 3 bill eased to 16.20/16.15. The market closed the week on a calm yet bullish note, with trades consummated on the September 3 bill at the 16.00% level. Week-on-week, the average benchmark yield declined by 34bps to close at 18.43%.
We expect market to open on a calm note as market participants trade cautiously ahead of MPC’s decision.
FGN Bond Market
The FGN Bonds market traded mixed through the week, opening bullish on the back of the softer August inflation print, which strengthened expectations of a September rate cut. Activity was concentrated on the mid-tenor bonds, with the 2031s quoted at 16.40/16.05 and trades on the 2033s executed around 16.25%. Sentiment turned cautious midweek as participants awaited the NTB auction to gauge the DMO’s borrowing appetite, leaving the 2031s quoted at 16.65/16.10 and the 2033s at 16.55/16.00. Following the auction, which signaled a restrained borrowing stance, yields declined further, with the 2031s quoted at 16.40/15.95. However, the market ended the week on a calm yet bearish note as some profit-taking set in, with the 2031s closing around 16.50/16.30. Week-on-week, the average benchmark yield declined by 1bp to close at 16.47%.
We expect market to open on a calm note as market participants trade cautiously ahead of MPC’s decision.
FGN Eurobond Market
The Eurobond market traded mixed through the week, opening on an active note ahead of the U.S. retail sales release, which printed stronger at 0.6% versus the 0.2% consensus. Sentiment turned cautious as investors awaited the Fed’s policy decision, where Chair Jerome Powell announced a 25bps rate cut to 4.00%–4.25%, in line with expectations. However, Powell’s subsequent comments provided little clarity on the forward path of policy, leaving the market trading on a mixed note. On the data front, U.S. unemployment claims came in lower at 231k, compared to expectations of 241k and a prior reading of 264k, briefly supporting sentiment. The week ultimately closed on a bearish note, as Powell’s lack of clear guidance on future rate cuts triggered broad selloffs across emerging market. Week-on-Week, the average benchmark yield increased by 15bps to 7.86%.
We look forward to Flash PMI, GDP, Powell’s speech and PCE data print.
Currency Market
The value of the Naira to the dollar appreciated by 0.91% to close at ₦1487.90/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) declining by 29bps to close at 141,845.32. Market capitalization also declined, closing at ₦89.76 trillion. Market breadth was positive at 0.26x. Meanwhile, trading activity was mixed on the day, as the volume of shares traded improved by 33% to 431.18 million units, while the total value of shares traded increased by 60% to ₦13.49 billion.
Reflecting the week’s performance, the NGX All-Share Index recorded a 0.92% appreciation, as gains in GUINNESS (+28.60%), MULTIVERSE (+21.30%) and EUNISELL (+20.28%) were offset by declines in OMATEK (-18.18%), CORNERST (-15.42%), and SECUREID (-12.79%).
Overall, the NGX has posted a year-to-date gain of 37.88%. Other notable indices are the NGX Top 30 Index (-0.27%; 0.91% 1WK; 35.55% YTD), NGX Banking Index (-1.93%; -2.57% 1WK; 37.51% YTD), NGX Oil & Gas Index (-0.13%; 2.79% 1WK; -8.31% YTD), and NGX Insurance Index (-1.27%; -4.67% 1WK; 73.97% YTD).
