By Dipo Olowookere
The treasury bills market was relatively flat on Tuesday in the absence of OMO auction by the Central Bank of Nigeria (CBN) for the second straight session.
The market mainly focused on outcome of the Monetary Policy Committee (MPC) of the central bank yesterday and after the meeting, the CBN Governor, Mr Godwin Emefiele, announced reduction of the main interest rate by 50bps to 13.50 percent.
Business Post reports that this was the first time the apex bank was altering the monetary policy rate (MPR) since July 2016.
At the close of business on Tuesday, it was observed that buying interests were constrained by the relatively tight system liquidity levels, pushing yields on some mid and long tenor bills upward.
“Barring a renewed OMO auction by the CBN, we expect rates to trend by c.20-30bps lower, as market players react to the MPR cut by the CBN,” Zedcrest Research noted.
Meanwhile, rates in the money market moderated by 6.57 percent to 16.86 percent yesterday as banks were able to access the CBN’s SLF for their funding needs, while system liquidity improved to N80 billion positive.
This came on the back of the 6 percent decline suffered by the Open Buy Back (OBB) rate and the 7.14 percent decline recorded by the Overnight (OVN) rate.
While the OBB rate dropped to 16.43 percent from 22.43 percent, the OVN rate fell to 17.29 percent from 24.43 percent.
According to Zedcrest Research, “We expect rates to remain elevated tomorrow, as there are no significant inflows anticipated.”
Adedapo Adesanya 
Modupe Gbadeyanka