…At the money market, the overnight (OVN) rate expanded significantly by 792bps w/w to 34.0%, following the debits for the CBN’s FX Retail Dutch Auction (c. NGN1.31 trillion) on Thursday
SAT AUG 10 2024-theGBJournal| Bearish sentiments persisted in the Treasury bills secondary market, as the average yield across all instruments expanded by 51bps to 25.9%. Across the market segments, the average yield advanced by 32bps to 25.8% in the NTB segment and increased by 87bps to 26.1% in the OMO segment.
At this week’s NTB auction, the Debt Management Office (DMO) offered N216.09 billion – N16.59 billion for the 91-day, N51.35 billion for the 182-day and N148.15 billion for the 364-day bills – worth of instruments to investors.
Demand at the auction settled at N486.87 billion (previous: N373.95 billion), with a bid-to-offer of 2.3x. The auction closed with the DMO allotting exactly what was offered at respective stop rates of 18.50% (unchanged), 19.50% (unchanged) and 21.89% (previous: 22.10%).
Its believed the lackluster demand for instruments in the T-bills secondary market will likely remain sticky next week, further supported by the continuous dearth in system liquidity. As a result, we expect yields to rise further from current levels.
Meanwhile, at the money market, the overnight (OVN) rate expanded significantly by 792bps w/w to 34.0%, following the debits for the CBN’s FX Retail Dutch Auction (c. NGN1.31 trillion) on Thursday.
Notwithstanding, average system liquidity settled at a net long position of NGN10.61 billion (previous week: net short position of NGN132.33 billion) reflecting DMBs’ activities at the CBN SLF window (NGN419.87 billion).
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