Bond coupon payment, FAAC disbursement, maturing OMO bills to contract overnight lending rate

MATURING OMO BILLS worth N381.88 billion, FAAC disbursements to states and local governments of N382.52 billion, and bond coupon payments amounting to N6.02 billion are expected to outweigh outflows, thus, boosting system liquidity, which In effect will lead to a contraction in the overnight lending rate this week.

The overnight lending rate last week shed 192 basis points, week-on-week, to 11.42 percent, against last week’s close of 13.33 percent.

Rates were elevated through to mid-week following outflows from wholesale FX sales. However, inflows from matured OMO bills of N372.88 billion and retail FX refunds of N200 billion on Thursday boosted liquidity.

The CBN conducted the usual OMO auction, selling a total of NGN186.02 billion worth of bills.

in the 1-year contract to NGN409.92.At the parallel market, the naira enjoyed stability at N362, while it appreciated

In a survey of street markets in Ikeja showed that the naira traded flat, as the dollar traded at N362 per dollar and the pound sterling traded at N476, while the Euro traded at N415, to close the week.

At the Bureau De Change (BDC) window, the Naira also traded stable at N360 to the dollar and was bought at N358, while the Pound Sterling and Euro closed at N478 and N415 respectively as traders bought the pounds at N470 and the Euro at N405.

In the I&E FX window, appreciated by 0.05 percent to its lowest point N363.84.

Total turnover in the IEW rose by 36.4 percent to $1.114 billion, against $816.78 million recorded last week. Meanwhile, the foreign reserves continued to deplete during the week, dropping $375.67 million to $42.34 billion.

In the FX forwards market, the USD/NGN strengthened across most of the major dated contracts of 1-month (+0.07%), 3-month (+0.04%) and 6-month (+0.07%) dated contracts to N367.26, N374.08 and N384.99 respectively, while it depreciated by 0.47 percent