By Dipo Olowookere
The Central Bank of Nigeria (CBN) on Monday mopped up N25.14 billion from the financial system to reduce excess liquidity in circulation.
This exercise was done through the sale of treasury bills at the secondary market via Open Market Operation (OMO).
During the OMO sale, the amount soaked was about 50 percent of the total debt instruments offered to market players.
From the N10 billion worth of the 94-day paper, the apex bank sold N4.47 billion at 11.90 percent, from the N10 billion worth of the 185-day note, the sum of N1.13 billion was realized at 13.50 percent, while from the N30 billion worth of the 353-day bill, the CBN sold N19.54 billion at 15.00 percent.
At the close of transactions at the treasury bills market yesterday, the average yield advanced by 0.09 percent to settle at 15.07 percent.
It was observed that yields on the one-month note dropped 0.09 percent to close at 14.82 percent, the 6-month note fell by 0.18 percent to settle at 14.45 percent, while the 12-month bill declined by 0.02 percent.
Business Post reports that the 3-month paper appreciated yesterday by 0.73 percent to settle at 12.04 percent, while the 9-month note stayed flat.
Yields are expected to remain relatively stable today on the back of expected client flows into the market.
Meanwhile, rates in the money market spiked by 12 percent, with the OBB and OVN rates closing the day at 31.67 percent and 35.25 percent respectively.
This came on the back of a wholesale FX intervention by the CBN which is estimated to have worsened system liquidity to N225 billion negative as at the close of business.
The rates are expected to remain elevated, as there are no significant inflows expected on Tuesday (today).
Modupe Gbadeyanka