…At the Money market, the average system liquidity level declined to a net long position of N4.37 trillion
SAT NOV 22 2025-theGBJournal| The Treasury Bills yield were lower on Friday tracking the robust system liquidity and heightened expectations of a rate cut following October’s inflation print of 16.05% y/y, down from 18.02% in September.
The average yield across all instruments declined by 23bps w/w to 19.1%. By segment, NTB yields decreased by 3bps to 17.0%, while OMO yields closed lower by 26bps to 21.5%.
At Wednesday’s NTB PMA, the Debt Management Office (DMO) offered N700.00 billion worth of bills – N100.00 billion for the 91D, N150.00 billion for the 182D, and N450.00 billion for the 364D tenor(s).
Investor appetite remained strong, with aggregate subscriptions reaching N1.29 trillion, significantly overshooting the offer.
Eventually, the DMO sold N1.09 trillion at stop rates of 15.30% (unchanged), 15.50% (unchanged), and 16.04% (unchanged), indicating sustained demand and market confidence at prevailing rates.
Meanwhile, the Central Bank of Nigeria (CBN) conducted an OMO auction on Tuesday, offering N600.00 billion across the 173D and 182D tenors.
Total subscription settled at N3.77 trillion, with N2.98 trillion eventually allotted (Bid-to-cover ratio: 1.3x) at respective stop rates of 20.54% and 20.55%.
The CBN conducted another OMO auction the following day (Wednesday), offering N600.00 billion across the 174D and 188D papers, allotting N903.35 billion at stop rates of 20.45% and 20.54%, respectively.
Meanwhile, the naira depreciated this week by 1.5% w/w to N1,457.38/US$, as strong demand from corporates seeking to leverage available liquidity to secure imports ahead of the festive season outweighed the CBN’s US$250.00 million intervention to banks.
In the forwards market, the naira rates depreciated across the 1-month (-0.9% to N1,484.82/US$), 3-month (-1.1% to N1,538.50/US$), 6-month (-1.5% to N1,615.46/US$) and 1-year (-2.3% to N1,768.72/US$) contracts.
Meanwhile, gross FX reserves increased for the eighteenth consecutive week, growing by a sizable US$476.43 million w/w to US$44.12 billion (November 20).
At the Money market, the average system liquidity level declined to a net long position of N4.37 trillion (Prior week: N5.09 trillion), as combined OMO PMA issuance (N3.88 trillion) and net NTB sales (N390.02 billion) outweighed inflows from OMO maturities (N1.36 trillion).
Nonetheless, the OVN rate eased by 8bps to 24.8%, reflecting the continued overall liquidity support in the system.
Barring any liquidity mop-up by the apex bank in the coming week, inflows from OMO maturities (N489.37 billion) and FGN bond coupon payments (N14.99 billion) are expected to support system liquidity, likely putting downward pressure on the OVN rate.
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