CBN Rakes N154b from T-Bills Market via OMO as Demand Slows

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By Modupe Gbadeyanka

The Central Bank of Nigeria (CBN) on Thursday managed to soak the sum of N153.5 billion from the system through the sale of treasury bills via Open Market Operations (OMO).

Of the N450 billion worth of T-bills offered to traders yesterday, the apex bank could only manage to get N154 billion from them. This was as the demand for the government instruments of debt weakened yesterday.

A breakdown of the exercise showed that from the N100 billion worth of the 91-day bills, the central bank sold N24.68 billion from the paper at 11.05 percent.

Also, from the N350 billion worth of the 203-day bills, the CBN could only raise N128.86 billion at 12.15 percent.

At the close of transactions on Thursday, the market traded relatively flat, with slight selloff by offshore clients recorded, pushing yields higher on the shorter end of the curve.

The market is expected to remain slightly bearish today due to relatively weak demand in the market and an expected provisioning for a CBN retail forex aution by banks, analysts at Zedcrest Research said.

Meanwhile, robust system liquidity saw Open Buy Back (OBB) and Overnight (OVN) rates trending lower into sigle digit territory yesterday to close at 7.83 percent and 8.50 percent respectively.

The CBN floated an OMO auction to manage inflows from OMO T-bils maturities, but could only sell a total of N153.54 billion due to weak demand.

System liquidity consequently closed at N492.39 billion positive on the day.

The funding rates are expected to trend higher today as market players anticipate outflows for Bond Auction Settlement and retial forex funding.

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