T-Bills Market Flat as CBN Halts OMO Sales

By Dipo Olowookere

Against expectations, the Central Bank of Nigeria (CBN) did not conduct the sale of treasury bills via Open Market Operations (OMO) this week.

At the close of transactions yesterday, the T-bills market was relatively flat as investors wound up their books for the month.

Business Post reports that the market, however, witnessed the inflows from the FAAC distribution worth N741.8 billion into the financial system.

According to analysts at Zedcrest Research, “We expect the market to be largely driven by the tempo of OMO interventions by the CBN, with slight buying interests expected to resurface if the CBN fails to conduct an OMO auction prior to the PMA expected on October 3, where the Debt Management Office (DMO) intends to rollover a total of N133.5 billion maturing T-bills.”

Meanwhile, Business Post reports that the average money market rate increased on Friday 6.6 percent.

While the Open Buy Back (OBB) rate moved from 5 percent to 6 percent, the Overnight (OVN) rate jumped to 7.17 percent from 6.25 percent.

The rates appreciated as inflows from Retail forex refunds and OMO maturities in the previous session helped moderate outflows for the Retail FX auction in yesterday’s session.

System Liquidity, which opened the day at N580 billion positive, is estimated to close the month at same levels, having received a boost from FAAC Inflows later in the day.

“We expect rates to remain moderated opening next week, barring a significant OMO Sale by the CBN,” Zedcrest Research said.