Pension Fund Funding In FG Securities Rise By 16.5% To N9.9trn

Pension Fund Funding In FG Securities Rise By 16.5% To N9.9trn

Pension Fund funding in Federal Authorities debt devices (securities) rose 16.5 per cent, year-on-year to N9.9 trillion in February brought on by the excessive rate of interest regime prompted by the inflation combating measures of the Central Financial institution of Nigeria, CBN.

Since June final 12 months, the CBN, has raised the Financial Coverage Fee, MPR, 5 occasions and by 650 foundation factors to 18 per cent in a bid to curtail regular rise within the inflation fee to 21.9 per cent in February.

The MPR is the benchmark for figuring out the rate of interest charged by banks and in addition influences the yields on fastened earnings securities.

The hike in MPR prompted a common rise in rates of interest with yields on one month deposits rising to 7.56 per cent in February from 3.57 per cent in Might final 12 months. Equally, the rate of interest on the Federal Authorities’s 3-years Financial savings Bonds rose to 11.04 per cent in February from 8.93 per cent in Might final 12 months.

In a bid to benefit from this growth, Pension Funds elevated funding in authorities debt devices or securities by 16.5 per cent year-on-year to N9.9 trillion in February from N8.5 trillion in February 2022.

The Federal Authorities securities embrace FGN Bonds, Treasury Payments, Company Bonds, Sukuk, and Inexperienced Bonds.

The most recent knowledge from the Nigeria Pension Fee, PenCom, confirmed a gradual rise in pension fund funding in FG securities for the reason that first quarter, Q1’22, when it fell quarter-on-quarter, QoQ by 3.1 per cent.

In Q2 ‘22 pension fund funding elevated to N9.007 trillion representing QoQ progress of 5.9 per cent; in Q3’22 the funding worth elevated additional by 2.1 per cent QoQ to N9.192 trillion whereas in This autumn’22 the funding worth rose QoQ by 2.7% to N9.644 trillion.

Although pension fund funding in authorities securities fell marginally by 1.0 per cent, month-on-month, MoM, it nevertheless rose by 4.2 per cent, MoM to N9.8 trillion in February.