T-Bills Yields Finish 2018 at 15.26% after N154b OMO Sale

T-bills yields

By Dipo Olowookere

The average treasury bills yields at the secondary market close on Monday, December 31, 2018, at 15.26 percent after three tenors recorded losses and two maturities appreciated.

Business Post reports that yields on the one-month, 3-montha and 6-month tenors depreciated by 0.03 percent, 0.46 percent and 0.04 percent respectively to settle at 14.91 percent, 14.04 percent and 13.41 percent apiece.

However, the 9-month and 12-month maturities grew by 0.03 percent each to finish at 16.58 percent and 17.34 percent respectively.

It was observed that at the market on Monday, transactions were scanty as some market players sold off slightly in a bid to shore up their year-end cash positions in the wake of the N154 billion OMO sale by the Central Bank of Nigeria (CBN).

During the exercise, the apex bank sold N24 million worth of the 94-day bills at 11.90 percent, N1.67 billion worth of the 185-day paper at 13.50 percent, N16.92 billion worth of the 346-day note at 15.00 percent and N135.19 billion worth of the 346-day special bill at 15.00 percent.

According to analysts at Zedcrest Research, yields are expected to remain high going into the New Year, as the CBN is expected to maintain its current spate of OMO issuances.

“We however expect slight moderation on the shorter end of the curve, as market players would look to cherry-pick on some attractive maturities in the New Year,” it said.

Meanwhile, rates in the money market remained slightly pressured with the OBB and OVN rates inching higher to close at 19.00 percent and 20.17 percent respectively.

This came on the back of the continued OMO and wholesale FX interventions by the CBN, even as market players sought to bolster their year-end cash positions.

System liquidity is estimated to close the year in negative territory of N500 billion given the OMO and FX debits by the CBN in the previous and current session.

The rates are expected to remain elevated due to the relatively tighter level of system liquidity and with the CBN expected maintain its current spate of OMO issuances in the New Year.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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