By Modupe Gbadeyanka
During trading this week, the Central Bank of Nigeria (CBN) will likely be aggressive with its sale of treasury bills via Open Market Operations (OMO), analysts at Business Post have noted.
This Wednesday, the apex bank will auction fresh treasury bills worth N115.12 billion to investors through the primary market.
A breakdown of the expected exercise showed that the central bank will offer for sale 91-day bills worth N24.37 billion, 182-day bills worth N38.75 billion and 364-day bills worth N52.00 billion.
With treasury bills worth N464.8 billion maturing the next day via the secondary and primary markets, the apex bank will be looking forward to intensify its OMO auctions to mop up excess liquidity in the financial system.
This was corroborated by analysts at Cowry Asset, who are of the opinion that the sustenance of liquidity ease in the financial system in the week should lower interbank rates.
Last week, NITTY further moderated for most maturities tracked on sustained buy pressure, with the yields on one-month, 3 months and 12 months maturities decreasing to 9.85 percent from 12.07 percent, 12.05 percent from 12.25 percent and 17.18 percent from 17.34 percent respectively.
However, yield on the 6 months maturity rose to 14.88 percent from 13.65 percent.
Elsewhere, the liquidity impact of the matured T-bills worth N578.99 billion, the N649.19 billion distributed by the Federation Account Allocation Committee (FAAC) as well as the absence of OMO sales by CBN led to partial ease in financial system liquidity, in line with expectation.
Hence, NIBOR for 1 month and 3 months tenure buckets moderated to 11.22 percent from 12.62 percent and 12.83 percent from 12.92 percent respectively.
However, NIBOR for overnight funds and 6 months tenure buckets increased to 21.50 percent from 17.46 percent and 15.37 percent from 14.50 percent respectively.
