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
