By Dipo Olowookere
Last week, the Central Bank of Nigeria (CBN) sold treasury bills worth N745.42 billion to investors at the market.
According to analysts at Cowry Asset, this amount comprised N650 billion sold via the Open Market Operations (OMO) and N95.42 billion via primary market conducted on Wednesday.
However, as expected, the stop rates of the 91-day, 182-day and 364-day auctioned T-bills moderated to 10 percent from 10.90 percent, 10.95 percent from 12 percent and 11.15 percent from 12.08 percent respectively.
The outflows were offset by N371.83 billion in matured T-bills as well as residual effects of FAAC disbursements worth N654.49 billion.
Hence, NIBOR moderated for all tenor buckets renewed liquidity ease, in line with our expectation: NIBOR for overnight, 1 month, 3 months and 6 months tenor buckets fell w-o-w to 3.00% from 3.59 percent, 11.27 percent from 12.05 percent, 12.94 percent from 14 percent and 14.13 percent from 15.84 percent respectively.
Elsewhere, NITTY fell for most maturities tracked on renewed buy pressure: yields on the 3 months, 6 months and 12 months maturities fell to 10.90 percent from 10.92 percent and 11.31 percent from 11.55 percent and 11.94 percent from 12.62 percent respectively.
However, yield on the 12 months maturity fell to 12.62 percent from 12.90 percent respectively.
Meanwhile, Standing Deposit Facility (SDF) worth N570.18 billion outweighed, Standing Lending Facility (SLF) worth N240.43 billion by 137.15 percent, indicative of liquidity surplus.
This week, against the backdrop of recent ease in financial system liquidity, we anticipate stability in interbank interest rates in the absence of aggressive mop up via OMO sales.
Adedapo Adesanya