TUE, OCT 17 2023-theGBJournal| The Nigerian Treasury bills secondary market traded with bearish sentiments, as the average yield expanded by 1bp to 6.5%.
Across the curve, the average yield was flat at the short and mid segments but expanded at the long (+3bps) end due to sell pressures on the 345DTM (+35bps) bill. Elsewhere, the average yield remained at 12.1% in the OMO segment.
Similarly, proceedings in the Treasury bonds secondary market were bearish, as the average yield expanded by 1bp to 14.4%.
Across the benchmark curve, the average yield advanced at the short (+1bp) and long (+2bps) ends following profit-taking activities on the MAR-2024 (+3bps) and JUN-2053 (+24bps) bonds, respectively. Meanwhile, the average yield closed flat at the mid segment.
The overnight lending rate was unchanged at 1.5%, as the system liquidity closed at a net long position of N580.98 billion
Meanwhile, the naira depreciated by 8.2% to N848.12/USD at the Nigerian Foreign Exchange Market (NFEM), the biggest fall since May 2023, and despite the Central Bank of Nigeria’s (CBN) promise to ensure supply interventions from time to time until there is stability and liquidity in the market.
Analysts tells theGBJournal the market is still spooked by policy uncertainty. The concern, they say, is the ability of the CBN to provide enough liquidity to meet the backlog of demand.
Recall that the CBN Governor, Wale Edun, revealed over the weekend that the Federal Government is currently in talks with the International Monetary Fund (IMF) to issue a fresh loan of US$1.5bn.
”If this loan is approved, it may provide a short-term cushion for the CBN to address its FX liquidity issues; short term because the size of the backlog is currently unknown,” analysts at Coronation Research said.
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