SAT 05 MARCH, 2022-theGBJournal |The Treasury bills secondary market continued its bullish run for the fourth consecutive week, following the significant improvement in system liquidity (this week’s net average position: NGN326.39 billion vs last week: NGN69.72 billion) and local banks’ objective to re-invest idle cash.
Consequently, the average yield across all instruments declined by 37bps to 3.4%. Across the market segments, the average yield contracted by 129bps to 3.3% at the OMO segment.
At this week’s OMO auction, the CBN offered and allotted NGN30.00 billion worth of OMO bills to participants and maintained stop rates across the three tenors (89DTM – 7.0%, 173DTM – 8.5% and 348DTM – 10.1%), as with prior auctions.
Similarly, the average yield at the NTB segment moderated by 18bps to 3.4% as participants sustained buying activities following consistent moderation in stop rate at last few PMAs.
The CBN is set to roll over NGN94.00 billion worth of maturities to market participants at the auction.
Meanwhile, the overnight (OVN) rate contracted by 117bps w/w to 13.8% this week, as inflows from FAAC disbursements (NGN370.01 billion) and OMO maturities (NGN70.00 billion) outweighed funding pressures for CBN’s weekly OMO (NGN30.00 billion) and FX auctions.
Next week, we expect the OVN rate to remain in the double-digit territory as funding pressures for CBN’s (NTB, OMO and FX) auctions are likely to offset the sole expected inflow from OMO maturities (NGN110.00 billion).
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