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T-Bills Yields Rise 0.07% on Squeeze in System Liquidity

By Dipo Olowookere

Average yields on treasury bills slightly increased on Friday by 0.07 percent on the backdrop of a squeeze in system liquidity following funding for retail forex bids by banks.

However, yields are expected to be relatively stable in the coming week, barring a discontinuance of the regular OMO auctions by the Central Bank of Nigeria (CBN).

Yesterday, the treasury bills market traded on a flat note with some client interests witnessed on the 1-year 14-Feb bill issued in the previous day’s auction as market players have begun to price in a possible cut in PMA issuance following the successful Eurobond sales in the previous session.

Meanwhile, the money market rates sharply increased on Friday as a result of the withdrawal for forex auction, which may have led to a squeeze system liquidity.

Specifically, the overnight rate jumped to 19.50 percent 6.92 percent on Thursday, while the Open buy Back (OBB) rate spiked to 18.17 percent from 6.67 percent in the previous trading session.

These rates are expected to remain high next week due to expectations of continued OMO and FX sales (wholesale) by the CBN on Monday.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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