Nigeria’s money market rates stay low on N474.9bn inflow

The money market rates remained low at a single-digit level on Friday driven by buoyant liquidity in the system supported by Thursday’s inflows worth N474.9 billion.

The inflows consisted of N370.0 billion from Open Market Operation (OMO) bills and N104.9 billion from the Nigerian Treasury Bills maturities.

A report by the FSDH research showed that NT-Bills secondary market closed on a flat note on Friday with average yield across the curve remaining unchanged at 1.12 percent.

Average yields across short-term, medium-term, and long-term maturities closed at 0.64 percent, 0.68 percent, and 1.57 percent, respectively.

In spite of an excess system liquidly in the market, the NT-Bills market was quiet as compared to Thursday’s trading session.

In the OMO bills market, the average yield across the curve declined by 6 bps to close at 1.22 percent on Friday as against the last close of 1.28 percent. Buying interest was seen across short-term and medium-term maturities with average yields falling by 8 bps each. However, the average yield across long-term maturities remained unchanged at 2.42 percent. Yields on 8 bills declined with the 5-Jan-21 maturity bill registering the highest yield decline of 39 bps, while yields on 19 bills remained unchanged.

At the foreign exchange market, Nigeria’s currency was stable on Friday as the dollar traded at N460 and N459 on the black market and Bureau De Change (BDC) segment of the market.

The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic.

Traders see the local currency stable next week as lenders limit forex transactions by both firms and individual buyers on the black market to curb speculation.

However, at the Investors and Exporters (I&E) forex window, Naira weakened by 0.04 percent as the dollar was quoted at N385.83 as against the last close of N385.67. The analysts at the FSDH research said most participants maintained bids between N382.00 and N392.78 per dollar.

The foreign exchange daily turnover at the I&E window, increased marginally by 0.11 percent to $166.55 million on Friday from $166.37 million recorded on Thursday, data from the FMDQ indicated.