CBN Suspends OMO Sales on Market’s Tight Funding Pressures

March 27, 2018

By Modupe Gbadeyanka

The Central of Nigeria (CBN) on Monday suspended its usual sales of treasury bills via the Open Market Operations (OMO).

This was as a result of the relatively tight funding pressures in the market.

According to analysts at Zedcrest Research, the T-bills market was also relatively muted yesterday as buy interests were largely constrained by the squeeze in system liquidity due to the wholesale FX interventions by the CBN.

With anticipated inflows from retail FX refunds tomorrow, there are strong expectations that the apex bank will resume its issuance of OMO today.

Also, the average T-bill yields is expected to trend slightly lower from their flatly traded levels in Monday’s session.

Meanwhile, the money market rates broadly increased yesterday with the overnight and open buy back rates appreciating by 20 percent.

While the overnight rate jumped to 44.25 percent from 23.17 percent last Friday, the OBB rate increased to 43.33 percent from 20.83 percent.

It was observed that the rise in the rates was due to the squeeze in system liquidity from the FX interventions by the CBN ($210 million).

“We expect rates to crash below 20 percent tomorrow, due to anticipated inflows from retail FX refunds by the CBN,” analysts at Zedcrest Research said.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Leave a Reply

Previous Story

Nigerian Equities Lose 0.04% on Sell-off in Banking Stocks

business in nigeria
Next Story

South African Firms Storm Nigeria to Shop for Business Opportunities

Latest from Economy

Don't Miss