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T-Bills Market Quiet as Overnight Rate Crashes to 6.25%

By Dipo Olowookere

The absence of an OMO auction on Thursday left the treasury bills market trading quiet at the secondary market.

According to analysts at Zedcrest Research, the yields trended northwards by 0.20 percent despite the inflows of N261 billion from OMO T-bill maturities boosted system liquidity.

This was as market players remained constrained by expectations for a retail foreign exchange (forex) debit and a possible OMO intervention by the Central Bank of Nigeria (CBN) today.

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Yields are expected to close the week on a relatively flat note, unless the CBN fails to conduct an OMO auction, which would consequently result in resurgent buying interests, with a boost from FAAC payments expected today.

Meanwhile, Business Post reports that the average money market rate crashed to a single digit on Thursday by 11.67 percent to 5.63 percent.

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This was mainly influenced by the fall of the Open Buy Back (OBB) rate from 16.67 percent to 5 percent and that of the Overnight (OVN) rate from 17.92 percent to 6.25 percent.

“We expect rates to close the week on a moderate tone, with inflows from FAAC payments of about N350 billion expected to moderate outflows for the Retail FX auction today.

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“This is however barring a significant OMO sale by the CBN,” analysts at Lagos-based Zedcrest Research stated in their report.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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