T-Bills Yield Settles at 13% on Absence of OMO Auction

By Dipo Olowookere

The average yield of treasury bills at the secondary market on Thursday increased by 0.08 percent to close at 13 percent.

This was as a result of the bearish sentiment that overpowered the market yesterday coupled with the decision of the Central Bank of Nigeria (CBN) not to hold an OMO auction despite huge expectations for it.

Business Post reports that at the market on Thursday, treasury bills worth N60 billion matured.

With inflows from FAAC expected on Friday, investors are optimistic that the apex bank will float an OMO auction to mop up excess liquidity from the system.

It was observed that yield on the 3-month and 12-month bills fell by 0.08 percent and 0.04 percent respectively to close at 11.18 percent and 14.45 percent apiece.

However, the one-month paper recorded 0.35 percent hike in its yield to close at 10.86 percent.

Yield on the 6-month bill rose by 0.04 percent to 14.10 percent, while the 9-month bill increased by 0.13 percent to 14.43 percent.

Meanwhile, rates in the money market declined by 5 percent as inflows from retail FX refunds bolstered system liquidity which opened the day at N80 billion positive.

The Open Buy Back (OBB) and Overnight (OVN) rates consequently ended the session at 10.07 percent and 10.71 percent respectively.

“We expect rates to trend slightly higher tomorrow, due to expected outflows for bond auction debits, a possible OMO sale and Retail FX provisioning by banks,” Zedcrest Research said.