Yield on T-Bill Closed Flat amidst Rising Inflation Rate
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Yield on T-Bill Closed Flat amidst Rising Inflation Rate

Average yield on Nigerian Treasury Bill (NTB) closed flat at 0.47% on Friday amidst rising headline inflation rate.

After 16th consecutive monthly rise, December inflation printed at 15.75%, according to data from National Bureau of Statistics.

Today, the financial system liquidity was benign, opening the trading day at ₦242.93 billion, relative to ₦557.87 billion previously.

Chapel Hill Denham said in a note that the tempered liquidity was driven by the combination of ₦80 billion Open Market Operations (OMO) sales, together with the provisioning by banks for the bi-weekly retail FX auction.

Nonetheless, the interbank funding rates sustained deceleration.

The Open Buy Back (OBB) and the Overnight (OVN) rates moderating by 25 basis points (bps) apiece to 0.50% and 1.00%, respectively.

Analysts said OMO inflows of up to the tune of ₦226 billion is expected to keep the system greased with liquidity next week.

Thus, it is expected that strong liquidity in the financial system will place a ceiling on funding rates.

Sentiments remained broadly mixed in the fixed income market today.

At the front end of the curve, the NTB benchmark yield curve closed flat at 0.47% on average.

Meanwhile the OMO benchmark curve declined slightly by an average of 10bps to 0.82%.

Elsewhere in the bond market, the bears dominated the market, with the benchmark bond yield curve rising by as much as 15bps to 6.96% on average.

Chapel Hill Denham said most of the drivers stemmed from the short and mid-end of the curve.

It was observed that both expanded by 3 bps and 32bps to 3.85% and 7.74% on average, respectively.

Meanwhile, for the second straight session, the long-end of the curve closed flat at 8.36%.

In the currency market, the Naira closed flat against the United States dollar at the Investors & Exporters Window at ₦394.67.

Similarly, the Naira also traded flat against the dollar in the parallel market, closing at ₦475.00.

Read Also: Money Market Rates Remain Soft on Robust System Liquidity

External reserves sustained its uptrend, rising by 1.13% week-to-date to US$36.30 billion reflecting the impact of net foreign currency inflows.

Yield on T-Bill Closed Flat amidst Rising Inflation Rate