By Dipo Olowookere
In the money market this week, interbank rates are anticipated to moderate as a result of huge inflows hitting the market.
Business Post reports that during the week, specifically on Thursday, treasury bills worth N684.84 billion will mature via the secondary market.
This, along with the effect of the N788.14 billion federally collected revenue distributed by FAAC, is expected boost financial system liquidity and according to Cowry Asset analysts, both inflows will “result in a corresponding downward trend in NIBOR.”
With these anticipated inflows, we at Business Post expect the Central Bank of Nigeria (CBN) to be aggressive with its weekly mop up to soak the excess cash in the system via the OMO auctions.
Last week, the CBN auctioned treasury bills worth N150.60 billion in the primary market and amid high demand for short term securities, the stop rates for the 91-day and 182-day auctioned T-bills further moderated to 10.90 percent from 10.95 percent and 13.10 percent from 13.16 percent respectively; however, the stop rate for the 364-day maturity was flattish at 14.45 percent.
The next day after the PMA, the apex bank also sold N443.76 billion in the secondary market. The total outflows worth N683.23 billion offset the inflows from the matured T-bills worth N594.36 billion.
Consequently, NIBOR rose for all the tenor buckets tracked as the financial system liquidity squeezed: NIBOR for overnight funds, 1 month, 3 months and 6 months moderated to 16.13 percent from 6.29 percent, 13.94 percent from 12.09 percent, 14.21 percent from 13.88 percent and 14.81 percent from 14.44 percent respectively.
Meanwhile, NITTY rose for all maturities tracked as FPIs continued to sell down their investment: yields on 1
month, 3 months, 6 months and 12 months increased to 13.51 percent from 11.52 percent, 13.45 percent from 13.41 percent, 14.19 percent from 13.66 percent and 17.38 percent from 16.73 percent respectively.
Adedapo Adesanya