T-Bills Yields Drop 0.16% as Overnight Rate Rises to 16.29%

By Dipo Olowookere

The secondary market for treasury bills closed bullish on Wednesday on the continued absence of an OMO sale by the Central Bank of Nigeria (CBN).

The average yields of the debt instrument consequently depreciated by 0.16 percent to settle at 12.73 percent.

Business Post reports that yield declined across the maturities yesterday.

It was observed that the one-month tenor declined by 0.12 percent to 11.13 percent, the 3-month paper lost 0.46 percent to close at 11/16 percent, the 6-month bill depreciated by 0.01 percent to end at 13.99 percent, while the 12-month bill lost 0.03 percent to settle at 14.62 percent.

According to Zedcrest Research, “We expect yields to trend slightly higher tomorrow, as system liquidity is expected to further tighten via a likely OMO auction on Thursday and/or a bi-weekly retail FX funding on Friday.”

Meanwhile, rates in the money market remained relatively unchanged as system liquidity remained depressed at N46 billion opening in the day.

At the close of market, the Open Buy Back (OBB) rate dropped to 15.14 percent from 15.43 percent, while the Overnight (OVN) rate rose to 16.29 percent from 16.21 percent.

Analysts are of the view that rates will remain high on Thursday due to the tight system liquidity levels and a likely OMO auction which could spook rates higher.