By Dipo Olowookere
The treasury bills market traded flat on Monday as the Central Bank of Nigeria (CBN) refused to sell OMO bills yesterday despite receiving offers from investors.
In addition, the average yields of treasury bills remained unchanged at the close of market on Monday at 15.51 percent.
This came on the backdrop of a further squeeze in system liquidity coming from the Wholesale foreign exchange sales by the apex bank.
Yesterday, the central bank offered N60 billion worth of OMO bills to market traders, but received bids worth N46.262 billion.
A breakdown showed that from the N10 billion worth of the 101-day bills auctioned, the CBN got a paltry subscription worth N2 million, while from the N50 billion worth of the 262-day instrument, the apex bank had N46.26 billion bids from investors.
But despite these subscriptions, the central bank issued a no-sale OMO result.
However, the market is expected to remain relatively stable due to the tight system liquidity barring a further hold on OMO issuance which could fuel some bullish sentiments amongst investors.
Meanwhile, money market rates appreciated sharply yesterday as a result of the squeeze in Naira liquidity coming from the forex interventions by the apex bank.
The overnight rate increased to 26.67 percent from 19.50 percent at the last trading day on Friday, while the open buy back (OBB) rate grew to 25.17 percent yesterday from 18.17 percent in the last trading day.
However, the rates to remain high on Tuesday as there are no significant inflows expected into the system.
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