Cautious Trading at T-Bills Market as Investors Await MPC Outcome

By Modupe Gbadeyanka

Transactions at the treasury bills market on Monday was relatively quiet as the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN) kicked off yesterday in Abuja.

The MPC meeting will round up today, while the CBN Governor, Mr Godwin Emefiele, is expected to announce outcome of the meeting to newsmen later in the afternoon, especially on if the interest rate was retained or not.

At the T-bills market yesterday, mixed activities were witnessed on select maturities.

According to Zedcrest Research, discount rates compressed by a single basis point on the average across the benchmark securities.

“While we expect cautious trading for the T-bills market ahead of the MPC announcements, system liquidity should support bullish sentiments during the rest of the week as expected liquidity flows spur investors to reinvest these payments,” Zedcrest Research said.

Meanwhile, buoyant system liquidity via inflows from bond coupon payments of N67.82 billion in addition to an opening figure of N140.15 billion caused a drop in the interbank money market rates.

While the Open Buy-Back (OBB) rate dropped to 9.43 percent from 15 percent, the Overnight (O/N) rate went down to 10.57 percent from 15.67 percent.

The system liquidity is expected to remain buoyant for the rest of the week, as the outstanding FAAC payments as well as OMO maturities N404.32 billion hit the system this week.

However, the central bank is expected to monitor the liquidity levels and may deploy more than the single weekly OMO auction to stem the flows.