OMO Bills Auction Settlement Tightens Money Market Liquidity
The Central Bank of Nigeria (CBN) OMO bills auction settlement tightened the liquidity level in the money market, causing rates to shift in reaction to the adjustment.
Analysts said they expect the OMO auction settlement totalling N2.12 trillion for the primary market action conducted on Friday to push rates higher in the new week. .
System liquidity settled around N1 trillion, from a deficit position of -NGN0.32 trillion at the previous close, as market activity normalised following Friday’s primary market sales, Meristem Securities Limited said in a note.
Nigerian Interbank Borrowing Rate (NIBOR) opened the week on a positive note, with declines across all tenors reflecting still robust liquidity conditions in the banking system.
Banks activities at the CBN standing deposit facility maintained its downward trend after the authority sharp liquidity mopped up in the last two weeks.
Total placements at the window averaged ₦1.54 trillion, down 171% from ₦4.18 trillion the prior week. Overall, liquidity stayed in surplus but declined 47% to ₦1.80 trillion at the close of trading session on Friday
On Monday, money market funding rates showed mixed movements, as the Overnight Rate remained unchanged at 24.50%, while the Open Repo Rate edged up slightly by 2 bps to 24.86%.
The Treasury Bills secondary market recorded mixed movements across NITTY yields, as the 3-month and 12-month tenors advanced by 9 bps and 5 bps, respectively, according to Cowry Asset Management Limited.
Meanwhile, the 1-month remained flat, and the 6-month yield declined by 8 bps, Cowry Asset Limited said in its report, adding that despite these divergent trends, the average Nigerian Treasury Bills yield dipped slightly by 3bps to 17.35%, reflecting bullish investor sentiment and sustained demand in the secondary market.
OMO Bills Auction Settlement Tightens Money Market Liquidity Fitch Affirms Nigeria at ‘B’ with Stable Outlook

