T-Bills Yields Drop as N175b Inflows Boost Liquidity

By Dipo Olowookere

The first trading day at the treasury bills market in Nigeria was slightly bullish as the inflows from Paris club credits of about N175 billion by the Central Bank of Nigeria (CBN) strengthened the system liquidity yesterday.

As a result, treasury bills yields marginally lost 0.05 percent with slight buying interests observed on 10-Jan and 28-Mar, whilst other maturities traded relatively flat on the day.

Zedcrest Research, an investment firm based in Lagos, expects the market to remain relatively calm in the near term, as appetite for the CBN’s weekly OMO auctions continues to dominate sentiments in the market ahead of the OMO maturity of N227 billion on Thursday.

Meanwhile, the average money market rates depreciated on Monday by 11.64 percent to settle at 10.04 percent.

This followed the 11.36 percent and 11.92 percent decline in the Open Buy Back (OBB) and Overnight (OVN) rates.

While the OBB rate depreciated from 20.86 percent to 9.50 percent, the OVN rate went down to 10.58 percent from 22.50 percent.

The sharp drop in the money market rates was mainly due to the inflows from Paris Club credits, which bolstered system liquidity to N250 billion positive.

The rates are expected to remain relatively stable as there are no significant outflows expected today.