By Dipo Olowookere
The average treasury bills yields declined at the market on Monday as the Central Bank of Nigeria (CBN) continued with its regular Open Market Operations (OMO) auction.
Business Post reports that the yields depreciated yesterday by 0.07 percent as the apex bank raised N88.9 billion from the sale of OMO bills to investors.
From the 87-day bills, the central bank raise a meagre N51 million, while N88.8 was raked from the 227-day instrument.
While the shorter dated bill was sold at 12.60 percent stop rate, the longer dated instrument cleared at 14.40 percent.
It was observed that the 227-day bill was oversubscribed by traders as N70 billion worth of the paper was offered by the CBN, while N30 billion worth of the 87-day bill was auction to investors yesterday.
Business Post further reports that generally, the T-bills market traded on a slightly bullish note and the positive trend is expected to stretch to Tuesday on the back of the cut in PMA.
This should however be moderated by a significant OMO Auction by CBN, especially if a longer dated bill is offered.
Meanwhile, both the overnight and open buy back (OBB) rates increased on Monday following a squeeze in system Liquidity from the OMO sales and forex injections by the apex bank worth $210 million.
While the overnight rate jumped to 14.67 percent on Monday from 9.17 percent last Friday, the OBB rate appreciated to 13.67 percent from 8.50 percent.
However, the rates are expected to be slightly moderated today on the back of expected inflows from retail FX refunds to banks.
