N498b Maturing Treasury Bills to Boost Liquidity

By Modupe Gbadeyanka

Treasury bills worth N497.82 billion will mature both in the primary and secondary markets on Thursday, analysts at Cowry Asset have said.

This is expected to boost financial system liquidity and result in a corresponding downward trend in NIBOR as the expected N60 billion bond auction will not be sufficient to dry up the liquidity from the maturing treasury bills.

Last week, the Central Bank of Nigeria (CBN) sold T-bills worth N128.18 billion through Open Market Operations (OMO).

The outflows partly offset the inflows from the matured T-bills worth N551.36 billion, while the net inflow chiefly contributed to the fall in NIBOR for overnight funds and 3 months tenor buckets amid financial liquidity ease to 25.19 percent from 26.17 percent and 15.21 percent from 15.32 percent respectively.

However, NIBOR for 1 month and 6 months rose to 15.38 percent from 14.95 percent and 15.24 percent from 15.23 percent respectively amid a Standing Lending Facility worth N862.65 billion which outweighed the Standing Deposit Facility (SLF) worth N80.83 billion. Meanwhile, increase in NITTY for most maturities tracked was sustained as investors continued to demand for higher yields amid increased risk environment: yields on 1 month, 6 months and 12 months rose to 14.90 percent from 14.78 percent, 14.42 percent from 14.33 percent and 17.55 percent from 17.33 percent respectively; however, yield on 3 months fell to 14.34 percent from 14.80 percent.