Treasury Bills Yields Drop 0.05% to 2.87%
By Dipo Olowookere
The average yields of treasury bills at the secondary market went down on Wednesday by 0.05 percent to settle at 2.87 percent on the back of buying pressure witnessed at the session.
It was observed that yields declined across most of the tenors monitored during the midweek trading day.
An analysis of the day’s transactions showed that only the one-month maturity recorded a rise in yield. The bucket appreciated by 0.20 percent to 2.27 percent from 2.07 percent it closed on Tuesday.
Yield on the three-month maturity fell by 0.25 percent to 2.15 percent to 2.40 percent, the six-month instrument declined by 0.04 percent to 2.99 percent from 3.03 percent, while the 12-month tenor decreased by 0.12 percent to 4.05 percent from 4.17 percent.
At the OMO market, the buoyant system liquidity led to another consecutive day of bullish trading.
Rates dropped another 0.20 percent across the benchmark OMO curve yesterday as banks remained heavy buyers for most offered maturities.
At the long-end of the curve, rates continue to drop and face another resistance level as offers dropped as low as 11.00 percent in Wednesday’s session.
There is a possibility of the Central Bank of Nigeria (CBN) floating an OMO auction on Thursday to manage excess liquidity in the system.
Today is the last trading session of this week as Christians prepare to mark the Good Friday holiday and Easter Sunday and Monday.
Meanwhile, the interbank market continued to be a takers delight, with rates remaining depressed, as system liquidity still opened buoyant, about N460 billion positive.
Consequently, the Open Buy Back (OBB) rate declined to 2.83 percent from 3.50 percent, while the Overnight (OVN) rate depreciated to 3.17 percent from 3.83 percent.
“With OMO maturities expected today, we expect the CBN to float an OMO auction to manage the high liquidity levels. Money market rates are expected to oscillate in tandem with liquidity levels in Thursday’s session,” analysts at Cowry Asset said.