T-Bills Market Stays Bullish as Money Market Rates Drop on Reduced Funding Pressures

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By Dipo Olowookere

Activities in the treasury bills market remained bullish on Tuesday like in the previous session.

Business Post reports that this was supported by buoyant system liquidity and demand from investors looking to reinvest bond coupon payments in the interim as yields continue to adjust to local and international headwinds.

According to analysts at Zedcrest Research, discount rates compressed by about 0.24 percent across the trading benchmark securities, with majority of the demand witnessed on the short to medium end of the curve.

This trend is expected to continue in the interim, barring any liquidity management action by the Central Bank of Nigeria (CBN).

On Wednesday (today), the Nigerian government is expected to rollover N5.85 billion, N26.60 billion and N145.96 billion of the 91-day, 182-day and the 364-day bills respectively at the primary auction.

The stop rates are expected to close lower than the previous auction, as system liquidity continues to support investor demand for treasury bills.

Meanwhile, rates in the interbank money markets dropped further amidst buoyant liquidity and reduced funding pressures on market participants.

Specifically, the Overnight (O/N) and Open Buy-Back (OBB) rates closed at 7.50 percent and 8.58 percent in line with the theme of the week.

“Our expectations for low interbank rates remain as inflows from bond coupon payments (N34.71 billion) are expected to hit the system from today,” those at Zedcrest Research said.

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