T-Bills Market Bearish on Absence of OMO Sale by CBN

By Dipo Olowookere

The absence of an OMO auction by the Central Bank of Nigeria (CBN) left the secondary treasury bills market further slightly bearish on Friday.

During the trading session, the average yields appreciated by 0.46 percent as system liquidity was significantly compressed by debits for the retail forex intervention by the CBN.

It was observed that at the market yesterday, there were continued selloffs on the shorter tenured maturities.

According to Zedcrest Research, “We expect yields to remain pressured in the coming week, as the

CBN is expected to maintain its spate of OMO and FX interventions in the market.”

At the money market on Friday, Business Post reports that the average rates increased by 7.4 percent to settle at 21.9 percent.

This came on the back of the 5.92 percent rise in the Open Buy Back (OBB) rate and 8.83 percent increase in the Overnight (OVN) rate.

It was observed that the increase in the money market rates was chiefly influenced in the debits for the retail forex intervention by the central bank, which is estimated to have mopped up N250 billion from system liquidity opening for the day at N265 billion positive.

The rates are anticipated to remain elevated opening the week as the CBN is expected to resume its OMO and wholesale forex interventions.