By Modupe Gbadeyanka
The Central Bank of Nigeria (CBN) on Thursday soaked up excess liquidity inflows in to the system with the sale of treasury bills via the Open Market Operations (OMO).
Business Post reports that the central bank, at the OMO auction yesterday, sold T-bills worth N561 billion to market players.
However, this was a significant under subscription of the OMO auction which had a total amount of N800 billion on offer by the apex bank.
A breakdown of the exercise showed that out of the N150 billion 112-day bill offered to investors, the central bank could only manage to receive a meagre subscription worth N349 million. This instrument cleared at 11.05 percent stop rate.
For the N650 billion worth of the 231-day bill, the bank received subscription of N560.92 billion at 12.15 percent.
It was observed that the T-bills market traded on a relatively flat note on Thursday as significant inflows from OMO and FGN Bond maturities of about N780 billion were relatively muted.
However, the yields are expected to trend lower today a system liquidity remains significantly buoyant, up about N500 billion barring a further OMO sale by the CBN to make up for the residual amount.
Meanwhile, the money market rates increased slightly yesterday with the Open Buy Back (OBB) and Overnight rates rising higher to 2.83 percent and 3.67 percent respectively.
This was following the OMO sale by the apex bank to mop up the excess liquidity inflows in to the system.
Barring a further OMO sale by the CBN, the rates are expected to remain moderated as system liquidity remains significantly buoyant with no significant funding pressures expected in the system tomorrow.
Adedapo Adesanya