By Dipo Olowookere
The treasury bills space was bullish on Monday with corresponding yields declining at the close of transactions.
Except for the 6-month maturity, which appreciated by 0.42 percent to settle at 14.30 percent, every other tenor depreciated yesterday.
This left the average rate declining by 0.04 percent to 14.66 percent as a result of the offshore interests mostly around the short-dated tenors, with some demands also seen on the long end of the curve.
A significant squeeze in system liquidity was observed as a result of the OMO auction conducted by the Central Bank of Nigeria (CBN) as well as the wholesale forex intervention.
During Monday’s trading session, the apex bank mopped up about N180 billion from the market via the OMO sale.
A breakdown of the exercise showed that N12.63 billion worth of the 91-day bill was sold, N27.37 billion of the 19-day was auctioned, while N139.60 billion of the 364-day paper was sold to investors with the rates retained at the previous levels.
Analysts at Zedcrest Research noted that despite the resurgent interests from offshore investors as evidenced in the increased volumes in the I&E FX market, they expect T-bill yields to remain slightly elevated due to the regular OMO interventions by the CBN.
Meanwhile, the average money market rate appreciated yesterday by 10 percent to 26.25 percent on the back of the CBN forex intervention and the OMO sale.
The Open Buy Back (OBB) and the Overnight (OVN) rates consequently closed the day at 25.33 percent and 27.17 percent respectively.
However, the funding rates are expected to moderate slightly today as banks would be able to access the CBN’s SLF window to fund their obligations.
Adedapo Adesanya