The Central Bank of Nigeria (CBN) will on Wednesday roll over Treasury bills (NT-bills) maturities worth N90.94 billion and Open Market Operation (OMO) maturities to the tune of N92.8 billion in the financial markets.
The inflows as well as unfilled bids from last week’s Primary Market Auction (PMA) are expected to enhance system liquidity this week.
The auction will consist of N1.80 billion for 91-day tenor, 182-day (N4.50 billion), and 364-day tenor (N84.64 billion).
Banking system liquidity improved on Thursday last week to about N737.9bn driven by OMO inflows worth N149.7bn. Investor sentiment remained weak for the last two trading sessions as the CBN floated an OMO auction to manage the excess liquidity.
The auction witnessed a total oversubscription of N298.7bn across the 82-, 173- and 341-day offered tenors. Nevertheless, the CBN allotted only the offered amount of N70.0bn across the three tenors with stop rates trending lower to 5.0%, 7.8% and 9.0% respectively. Furthermore, the Apex bank debited some banks for CRR requirement which pushed system liquidity down to N465.3bn long on Friday, according to a report by Afrinvest Securities Limited.
“We expect activities in the secondary market to remain lukewarm with rates broadly stable. We also do not rule out the tendency for domestic investors to re-invest some of their OMO maturities while searching for more attractive yields in potential Commercial Paper offerings,” analysts at Afrinvest said.
NT-bills market closed on a flat note on Tuesday, with average yield across the curve remaining unchanged at 3.39 percent, a report by FSDH research indicated.
The Overnight rate and the Open Buy Back (OBB) rate remained unchanged at 14.42 percent and 14.50 percent, respectively, as the system liquidity tightened further following Sukuk funding of N150 billion.
At the foreign exchange market, Nigeria’s currency gained N0.25k as the dollar was quoted at N387.08k after trading on Tuesday from N387.33k closed on Monday at the Investors and Exporters (I&E) forex window, data from FMDQ showed.
The daily FX turnover increased by 116.98 percent to $31.81 million on Tuesday from $14.66 million on Monday.
On the black market, Naira gained N2.00k as the dollar traded at N448 on Tuesday from N450 traded on Monday.
At the retail bureau, naira remains stable at N450 to the dollar. Also at the official, Central Bank of Nigeria (CBN) window, the local currency was stable at N361.00k/$.
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