By Dipo Olowookere
The secondary market for treasury bills in Nigeria opened the week bearish on Monday in the absence of OMO auction by the Central Bank of Nigeria (CBN).
This elevated the average yields by 0.13 percent to 13.37 percent at the close of transactions, with yield for all tenors rising except the 9-month paper, which went down by 0.01 percent to 14.73 percent.
Business Post reports that yield on the one-month note rose by 0.46 percent to close at 10.45 percent, the 3-month bill went up by 0.08 percent to 12.38 percent, the 6-month instrument increased by 0.04 percent to 14.28 percent, while the 12-month paper appreciated by 0.06 percent to 15.01 percent.
It was observed that the decision of the apex bank not to hold its usual OMO sale yesterday left system liquidity relatively buoyant in positive territory.
Yields are expected to remain relatively stable as investors are anticipated to sustain interests for relatively attractive bills ahead of the PMA auction scheduled for Wednesday.
However, a renewed OMO auction by the central bank today may likely further elevate the yields at the market.
On the money market, the average rates appreciated by 1.58 percent on Monday to settle for the day at 11.21 percent.
This was mainly influenced by the 1.66 percent rise in the Open Buy Back (OBB) rate and the 1.50 percent increase in the Overnight (OVN) rate.
While the OBB rate moved from 9.17 percent to 10.83 percent, the OVN rate rose to 11.58 percent from 10.08 percent.
It was observed that the rates ended at these levels on the back of moderately robust liquidity in the financial system yesterday, which was at around N70 billion despite the wholesale FX auction.
Barring any significant OMO sale by the central bank on Tuesday, the rates are expected to remain relatively stable.
