Overnight Rate Drops to 6.57% as OMO Maturities Bolster Liquidity

By Modupe Gbadeyanka

There was a significant decline in the average money market rates on Thursday amid absence of OMO sales by the Central Bank of Nigeria (CBN) to soak excess liquidity in the financial system.

Business Post reports that liquidity was further boosted yesterday with the inflows from OMO maturities.

Consequently, the average money market rates depreciated by 4 percent to close at 6.22 percent at close of business.

This came on the back of the 4 percent decline recorded each by the overnight and open buy back (OBB) rates.

While the overnight rate dropped to 6.57 percent from 10.57 percent, while the OBB rate fell to 5.86 percent from 9.86 percent.

Barring a renewed OMO sale by the CBN today, the rates are expected to remain relatively stable at the present level.

Meanwhile, the secondary market of treasury bills remained firmly bullish, with yields declining by 0.19 percent on the absence of an OMO auction by the CBN despite the N107 billion in OMO T-bills maturities.

Some market players also sought to cover lost out bids from the previous session’s NTB auction, where rates cleared significantly lower from their previous levels.

The one-month bill dropped 0.45 percent to close at 11.29 percent, the 3-month bill declined by 0.08 percent to 10.54 percent, the 6-month bill fell by 0.06 percent to 12.76 percent, while the 12-month bill depreciated by 0.15 percent to 13.87 percent.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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