By Dipo Olowookere
The secondary market for treasury bills came under selling pressure on Monday, November 18, 2019, causing yields to rise across most maturities monitored during the trading session.
There were selloffs in the one-month, three-month and one-year bills yesterday as the National Bureau of Statistics (NBS) released the much-anticipated inflation numbers for the month of October 2019, which increased by over 0.30 percent to 11.61 percent.
The economy has started to feel the impact of the closure of the country’s land borders by authorities coupled with the declining yields of treasury bills at both the primary and secondary markets.
But at the close of transactions yesterday, Business Post reports that the average yields of T-bills at the secondary market increased by 0.35 percent to settle at 10.37 percent.
According to data from FMDQ, yield on the one-month maturity increased by 1.10 percent to close at 9.84 percent from 8.74 percent, yield on the three-month tenor appreciated by 0.59 percent to 9.72 percent from 9.13 percent, while yield on the one-year bill rose by 0.58 percent to close at 12.51 percent in contrast to 11.93 percent it ended the previous session.
However, yield on the six-month maturity decreased by 0.86 percent to settle at 9.40 percent against 10.26 percent it closed last Friday.
Meanwhile, the money market rates increased on Monday by 4.43 percent to 18.00 percent with liquidity in the interbank market closing at N41.5 billion.
This came on the back of the 4.50 percent growth recorded by the Open Buy Back (OBB) rate and the 4.36 percent appreciation posted by the Overnight (OVN) rate.
According to Zedcrest Research, the hike in the hike recorded by the money market rates can be attributed to the inability of banks to access the SLF window due to Wholesale FX auction, FX swaps and CRR debit of some banks.
At the close of transactions, while the OBB rate rose to 17.57 percent from 13.07 percent, the OVN rate increased to 18.43 percent from 14.07 percent.
“We anticipate market to trade at these levels as no positive liquidity respite is expected to come till Thursday with OMO maturities of N350 billion flows into the system,” the investment company based in Lagos said in its report.
