T-Bill Rate Closed Flat as Financial System Liquidity Improves
Average yields stay flat in the Nigerian Treasury bill the second market as trading activities in the fixed income market remains muted amidst the projection that yield repricing will slow down in June.
However, there was an improvement in the financial system in terms of liquidity. With an opening balance of N214 billion, liquidity in the money market further strengthened and was reinforced by a decline in borrowings from the Standing Lending Financing (SLF) window, analysts said.
This comes in addition to a reported uptick in the balance in the Standing Deposit Financing (SDF) window. However, funding rates, the Open Buy Back (OBB) and Overnight (O/N) rates reacted to increased repurchased agreement activities and surged by 34bps and 50bps to 14.67% and 15.17% respectively on Wednesday.
It was noted that the fixed income market witnessed mild interest in the open market operations (OMO) and bond space while the Treasury bill maintained its week-long quiet streak.
Analysts at Codros Capital said in a report that the overnight lending rate expanded basically due to N91.27 billion that flows out for the Nigerian Treasury Bill auction conducted by the CBN today.
Activities in the Nigerian Treasury bill remained quiet as investors continue to anticipate the Treasury bill auction. Hence, the NTB benchmark curve closed flat at 6.04%. Investors expressed bullish sentiments on the long end of the OMO curve, with the biggest impact in the Feb-22 maturity.
“We believe the trades in the long end of the OMO curve reflected investor’s cherry-picking maturities. The OMO bench-mark curve compressed by 9bps to 9.22%”, Chapel Hill Denham said.
In the bond space, analyst said yesterday’s trade pattern repeated itself as investors displayed weak bearish sentiments on the Mar-27 and Mar-35 maturities and bullish sentiments on the Mar-50 maturity.
With these offsetting trades, the bond benchmark curve closed flat at 13.03%.
In the foreign exchange market, the Nigerian local currency, the naira appreciated at the I&E window by 0.1% to N410.95/USD but remained flat at N502.00/USD in the parallel market as external reserves slid to US$34.08 billion on 8th June from US$34.10 billion.
T-Bill Rate Closed Flat as Financial System Liquidity Improves
