Money market rates to rise on anticipated FX, OMO bills auction by CBN

Nigeria’s money market rates are expected to rise marginally Friday following anticipated foreign exchange (FX) retail auction and Open Market Operation (OMO) bills auction by the Central Bank of Nigeria (CBN), according to FSDH research.

Money market rates declined by an average of 530 bps as the system liquidity improved following OMO bills maturities worth N337.94 billion on Thursday.

The Nigerian treasury bills (NT-bills) market closed on a positive note on Thursday, with average yield across the curve declining by 9 bps to close at 3.30 percent.

A report by FSDH research revealed that at the Primary Market Auction held on June 17, the CBN sold NT-Bills worth N14.61 billion across the 91-day (N2.00 billion), 182-day (N2.00 billion), and 364-day (N10.61 billion) tenors. The stop rates across the 91-day, 182-day, and 364-day tenors cleared lower at 1.8000 percent (-20 bps), 2.0400 percent (-16 bps), and 3.7460 percent (-27 bps) respectively. The auction was oversubscribed by 509 percent with bid-to-cover ratios settling at 6.80x (91-day), 7.62x (182-day), and 5.67x (364-day).

The Overnight (O/N) rate declined by 5.22 percent to close at 3.70 percent. The Open Buy Back (OBB) rate declined by 5.37 percent to close at 2.80 percent.

In the OMO bills market, average yield across the curve remained unchanged at 4.86 percent, the report stated.

The FGN bond market closed on a positive note today, as the average bond yield across the curve cleared lower by 30 bps to close at 5.96 percent.

FGN Bond Auction for June 2020 was oversubscribed significantly by 263 percent due to ample liquidity in the market. The auction witnessed healthy demand across all the tenors with bid-to-cover ratios settling at 3.44x (5-year), 2.47x (15-year), and 4.73x (30-year). The DMO allotted bonds worth N100.0 billion across the 5-year (N32.99 billion), 15-year (N16.22 billion), and 30-year (N50.79 billion) tenors at marginal rates of 8.00 percent (-120 bps), 11.00 percent (-70 bps), and 12.15 percent (-45 bps), respectively.

At the foreign exchange market, Naira gained N0.30k as the dollar was quoted at N385.70k on Thursday compared with N386.00k quoted on Wednesday at the Investors and Exporters (I&E) forex window, data from FMDQ showed.

The daily FX turnover rose by 314.76 percent to $66.61 million on Thursday from $16.06 million recorded on Wednesday at the I&E window.

Nigeria’s currency lost N2.00k as the dollar was sold at N452 on Thursday compared with N450 traded since Monday on the black market.

Traders said on Thursday that there was a little increase in the demand for the greenback by the end-users.

The dollar traded unchanged at N454 on Thursday at the retail Bureau. Also at the official window, the cost of the dollar was stable at N361.

However, the foreign exchange market opened with an indicative rate of N386.63k on Thursday morning at the Investors and Exporters (I&E) forex window. This represents a loss of N0.24k in the value of Naira when compared with N386.39k opened with on Wednesday.

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Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.