By Dipo Olowookere
Yesterday, the Central Bank of Nigeria (CBN) conducted the second Open Market Operations (OMO) for the week.
During the exercise, the apex bank mopped up excess liquidity worth N364.98 billion from the system to curb inflation.
From the exercise, the central bank sold N23 million worth of the 91-day bill from the N100 billion offered to investors at 11.50 percent.
Also, the bank raked N78.67 from the 182-day note after auctioning N150 billion worth of the instrument and receiving subscriptions valued at N79.67 billion. This cleared at 13 percent, the same rate during Tuesday’s exercise.
In addition, the CBN sold N286.08 billion worth of the 357-day paper from the N350 billion offered to market players. This paper cleared at 14.50 percent, with subscriptions worth N287.08 billion received.
During Thursday’s session, treasury bills worth N367 billion matured via the secondary market, with the apex bank making retail forex refunds worth N150 billion.
It was observed that the market was relatively calm yesterday as a result of the significant robust system liquidity levels.
Consequently, yields were flat on the day, except for slight uptick seen on the FEB – APR maturities.
“We expect the market to close the week on a relatively stable note, with a marginal uptick in yields expected on the shorter end of the curve, due to expected outflows for a retail forex auction by the CBN,” Zedcrest Research said.
Meanwhile, the Open Buy Back (OBB) and Overnight (OVN) rates remained relatively unchanged to close the day at 3.67 percent and 4.25 percent respectively.
This was as system liquidity was further bolstered by inflows from OMO maturities and retail forex refunds which mitigated outflows for the OMO sale in today’s session.
System liquidity is consequently estimated to advance to N600 billion as at the close of business on Thursday.
Rates are to inch slightly higher on Friday due to expected outflows for the retail forex auction by the CBN.
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