T-Bills Yields Shed 0.17% on Absence of OMO Sales

By Dipo Olowookere

Yields on treasury bills at the secondary market on Friday went down by 0.17 percent amid the decision of the Central Bank of Nigeria (CBN) to pause its Open Market Operations (OMO).

At the previous session, the central bank conducted a primary market auction (PMA), where it rolled over a total of N129.6 billion in maturing treasury bills across three maturities.

During the exercise, the stop rates remained stable for the 91-day and 182-day tenors at 10.00 percent and 11.9499 percent respectively. However, the 364-day maturity finished higher at 12.34 percent.

At the trading session yesterday, the market traded bullish as a result of the buoyant system liquidity, which pushed the yields lower to 12.01 percent.

An analysis of yields of the traded debt instruments yesterday showed that the one-month tenor dropped 0.18 percent to settle at 10.94 percent, while yield on the 3-month bill depreciated by 0.62 percent to close at 11.02 percent.

However, yield on the 6-month maturity appreciated by 0.10 percent to end at 12.28 percent, while the 12-month tenor increased by 0.02 percent to close at 13.80 percent.

Meanwhile, the average money market rates went down by 0.07 percent on Friday to settle at 5.5 percent.

This followed the 0.14 percent drop recorded by the Open Buy Back (OBB) rate yesterday as the Overnight (OVN) rate closed flat.

At the close of transactions, the OBB rate went down to 5.29 percent, while the OVN rate stayed unchanged at 5.71 percent.

Market players had anticipated the mopping up of excess liquidity from the system via the sales of OMO bill, but this did not eventually happen.