CBN to Sell Trea­sury Bills Worth N229bn

THISDAY - - BUSINESS/ MONEY GUIDE - Obinna Chima

The Cen­tral Bank of Nige­ria (CBN) will this week con­duct its bi-weekly trea­sury bills auc­tion with to­tal of­fer of N229.1 bil­lion to off­set ma­tur­ing bills of the same amount.

In ad­di­tion, the cen­tral bank is ex­pected to float open mar­ket op­er­a­tions ( OMO) auc­tions to keep fi­nan­cial sys­tem liq­uid­ity tight.

Afrin­vest West Africa Lim­ited stated in a re­port at the week­end that de­spite re­peated OMO auc­tions, money mar­ket rates eased last week against the back­drop of an OMO re­pay­ment and im­proved sys­tem liq­uid­ity. The CBN con­ducted OMO auc­tions on all trad­ing ses­sions but for Mon­day.

De­spite this, sys­tem liq­uid­ity dur­ing the week re­mained in the pos­i­tive re­gion save for Wed­nes­day which had a neg­a­tive bal­ance of N53 bil­lion. Money mar­ket rates – Open Buy Back (OBB) and overnight (OVN) – were at first el­e­vated at the start of the week (rel­a­tive to pre­ced­ing Fri­day’s close of 14 per cent and 14.9 per cent re­spec­tively). But both rates closed at five per cent and 5.8 per cent re­spec­tively.

De­spite the MPC’s de­ci­sion to re­tain rates at cur­rent lev­els, per­for­mance of the sec­ondary trea­sury bills mar­ket was bear­ish last week as av­er­age yield rose on four of five ses­sions.

On the other hand, for­eign ex­change rate at the of­fi­cial mar­ket re­mained pegged within a range of N305.70/$1 - N305.75/$1 dur­ing the week, clos­ing at N305.70/$1.

At the par­al­lel mar­ket, rate ap­pre­ci­ated from last week’s close of N366.00/$1 to touch a 2017 high of N364/$1 on Wed­nes­day be­fore clos­ing the week at N365/$1.

Mean­while, at the NAFEX seg­ment, a to­tal of $983 mil­lion traded dur­ing the week with mar­ket rate ap­pre­ci­at­ing slightly from N366.45/$1 at the start of the week to close at N366.08/$1 on Fri­day.

“In the week ahead, we ex­pect the cen­tral bank to con­tinue its cur­rent ad­min­is­tra­tion of the forex mar­ket by way of weekly SMIS sales and op­er­a­tion of mul­ti­ple FX win­dows. Hence, we ex­pect rates to hover around cur­rent lev­els,” the re­port added.

Ac­tiv­i­ties in the do­mes­tic bonds mar­ket re­mained soft as the mar­ket recorded a bear­ish per­for­mance last week with av­er­age yield across bench­mark bonds ris­ing on four of five trad­ing days.

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