By Dipo Olowookere
On Thursday, the Central Bank of Nigeria (CBN) intervened in the treasury bills market by mopping up N190 billion from the system.
The central bank mopped up this cash with the sale of the government instrument via the Open Market Operations (OMO).
Business Post reports that the N190 billion raked from the exercise was significantly lower than the total amount offered by the CBN, N400 billion.
This amount, N190 billion, was also lower than the total amount of T-bills that matured at the market yesterday, N327 billion.
It was observed that generally, the treasury bills market traded on a relatively quiet note, with yields compressing slightly by 0.05 percent to finish slightly above 12 percent.
The yields are expected to remain stable today, barring a significant liquidity mop up via a further OMO sale by the CBN.
Meanwhile, the money market rates marginally went up on Thursday by 0.21 percent to settle at 3.29 percent.
The Open Buy-Back (OBB) rate increased to 3 percent yesterday from 2.83 percent in the previous session, while the Overnight (OVN) rate advanced to 3.58 percent from 3.33 percent.
It was observed that the growth in the money market rates was as system liquidity remained significantly buoyant at around N580 billion long, following inflows from OMO T-bill maturities, which was more than offset outflows from today’s OMO sale.
“We expect that the CBN may float another OMO today to make up for the residual offered amounts.
“Auction demand, if this happens, is however expected to remain weak, as market players have shown stronger preference for liquidity in anticipation of funding for their retail FX bids on Friday,” analysts at Zedcrest Research said.
Adedapo Adesanya