CBN Mops up N190b via Treasury Bills Sales

June 8, 2018
Treasury Bills

By Dipo Olowookere

On Thursday, the Central Bank of Nigeria (CBN) intervened in the treasury bills market by mopping up N190 billion from the system.

The central bank mopped up this cash with the sale of the government instrument via the Open Market Operations (OMO).

Business Post reports that the N190 billion raked from the exercise was significantly lower than the total amount offered by the CBN, N400 billion.

This amount, N190 billion, was also lower than the total amount of T-bills that matured at the market yesterday, N327 billion.

It was observed that generally, the treasury bills market traded on a relatively quiet note, with yields compressing slightly by 0.05 percent to finish slightly above 12 percent.

The yields are expected to remain stable today, barring a significant liquidity mop up via a further OMO sale by the CBN.

Meanwhile, the money market rates marginally went up on Thursday by 0.21 percent to settle at 3.29 percent.

The Open Buy-Back (OBB) rate increased to 3 percent yesterday from 2.83 percent in the previous session, while the Overnight (OVN) rate advanced to 3.58 percent from 3.33 percent.

It was observed that the growth in the money market rates was as system liquidity remained significantly buoyant at around N580 billion long, following inflows from OMO T-bill maturities, which was more than offset outflows from today’s OMO sale.

“We expect that the CBN may float another OMO today to make up for the residual offered amounts.

“Auction demand, if this happens, is however expected to remain weak, as market players have shown stronger preference for liquidity in anticipation of funding for their retail FX bids on Friday,” analysts at Zedcrest Research said.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

Leave a Reply

FGN Savings bond
Previous Story

FGN Savings Bond for June Closes Today

Lagos, LASACO Pay N280m Insurance Benefits
Next Story

Lagos, LASACO Pay N280m Insurance Benefits

Latest from Economy

Don't Miss