CBN Sells N27.7b OMO Bills as Overnight Rate Hits 41.67%

By Modupe Gbadeyanka

The treasury bills market was flat yesterday as a result of tight liquidity in the market with the Central Bank of Nigeria (CBN) auctioning $195 million at the foreign exchange market.

It was gathered that the average yields of treasury bills slightly dropped on Monday by 5 basis points to 17.93 percent.

This was also mainly influence by the tight liquidity in the market, which clipped the buying interests of traders.

At the close of business yesterday, a total of N27.665 billion worth of treasury bills were sold by the apex bank via the open market operations (OMO).

A breakdown showed that the central bank sold N5 million worth of the 87-day instrument, while the 192-day bills raked N27.66 billion.

Today, observers expect another relative flat T-bills market as a result of tight liquidity and high funding rates in the market.

The Monetary Policy Committee (MPC) will end its meeting today and will announce its decision on the interest rate.

However, observers do not expect the committee to drop the rate below its present rate, 14 percent.

Yesterday, the National Bureau of Statistics (NBS) said Nigeria’s economy recorded a growth of 1.4 percent in the third quarter of this year.

Meanwhile, the overnight rate increased yesterday to 41.67 percent from 27.67 percent last Friday, while the open buy back rate also rose to 38.33 percent from 26.67 percent.