SAT, SEPT 16 2023-theGBJournal |Amid tight interbank liquidity conditions in the money market, the Treasury Bills market adopted a cautious approach at the beginning of the week.
This cautious sentiment was further heightened by the NTB auction held on Wednesday, during which the DMO floated and offered ₦150.18 billion across the 91, 182, and 364-day maturities despite the subscription totaling ₦638.67 billion.
The auction’s stop rates settled at 4.50%, 7.00%, and 12.98% for the respective maturities.
Following this auction, investor interest notably focused on the newly issued 1-year Treasury bill (12-Sept-24), resulting in most trades settling in the range of approximately 11.50% by the end of the week.
Nonetheless, average benchmark yield inched higher by 5 bps over the week, ultimately closing at 6.87%.
We forecast lower yields as the market positions ahead of the bond coupon payments expected next week.
At the money market, the interbank market rates during the week, exhibited an upward trend driven by liquidity constraints, despite CRR refunds and bond coupon injections into the system.
Consequently, the Open Buy Back rate (OBB) surged by 581 basis points in a week-over-week assessment, peaking at 23.64%.
Simultaneously, the Overnight rate (O/N) experienced a significant increase of 567 basis points, reaching 24.42%.
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