T-Bills Yield Falls 2 Basis Points as Naira Holds Position
The average yield on Nigerian Treasury Bills (T-bills) in the secondary market falls 2 basis points midweek as naira, the Nigerian local currency holds a position against the United States dollar.
Greenback had beaten naira black and blue across the foreign exchange market but there appeared to be a balance between demand and supply of the greenback in the FX markets today.
Data from the FDMQ Exchange platform shows that Naira remained unchanged at ₦415.10 at investors and exporters foreign exchange window.
It is sufficient to say that the local currency has not gained what it had lost – the exchange rate was N414.80 at the official window. Central Bank quoted N411.92 on its website as of yesterday.
In a commentary, FSDH Capital hinted that most participants in the FX window maintained bids between ₦404.00 and ₦444.00 per dollar amidst a quest for a further devaluation by a slew of investment banking firms.
In the money market, the average interbank rate climbed by 4.38 percentage points to close at 14.13%, following expansions at both the Open Buy Back rate and Overnight rate.
The jumpy rates were on the back of strained liquidity position in the financial system. Data tracked from FMDQ Exchange shows that the Overnight rate increased by 425 basis points to close at 14.25 per cent as against the last close of 10.00 per cent.
Also, the Open Repo rate increased by 4.50 per cent to close at 14.00 per cent compared to 9.50 per cent on the previous day.
Amidst a quiet trading session due to unimpressive returns on the fixed income market, the Nigerian Treasury Bills secondary market closed with average yield across the curve decreasing by 2 basis points to close at 4.46 per cent from 4.48 per cent on the previous day.
Analysts are predicting that with a disinflationary trend and low-interest rate environment, fixed income market yields would remain subdued – also given the fact that Debt Management Office (DMO) has achieved its borrowing target for 2021.
Today, average yield across the long-term T-Bills maturities declined by 4 basis points, according to a note from FSDH Capital. However, the average yields across short-term and medium-term maturities remained unchanged at 3.39 per cent and 3.98 per cent, respectively.
The Nigerian Treasury Bills (NTB) 24-Nov-22 (-39 bps) and NTB 10-Nov-22 (-21 bps) maturity bills witnessed buying interest, while yields on 19 days to maturity bills remained unchanged.
In the Open market operation (OMO bills) market, the average yield across the curve closed flat at 5.45 per cent, according to analysts separate notes.
However, Average yields across short-term and long-term maturities remained unchanged at 5.43 per cent and 5.53 per cent, respectively.
FGN bonds secondary market closed today trading session with the average bond yield across the curve cleared lower by 2 basis points close at 8.10 per cent from 8.12 per cent on the previous day.
Average yield across the short tenor of the curve decreased by 3 basis points, according to FSDH Capital. However, the average yields across medium tenor and long tenor of the curve remained unchanged.
The FGNGB 22-DEC-2022 bond was the best performer with a decrease in the yield of 31 basis points, while the FGNSB 19-JUN-2022 bond was the worst performer with an increase in yield of 36 basis points.
FSDH Capital maintains projection that the secondary bond market is likely to remain subdued in the short term.
Elsewhere, Alpha Morgan Capital however hinted that activities at the FGN Eurobond market traded on mixed sentiments – the average yield declined slightly by 1 basis point to close at 7.44%.
#T-Bills Yield Falls 2 Basis Points as Naira Holds Position >>> Read more: Stop Rate on 364-Day T-Bills Projected to Rise as CBN Holds…
