Yield on Treasury Bills Ends 2021 at 4.43%, OMO 5.5%
In the secondary market, the average yield on Nigerian Treasury bills ends 2021 at 4.43 per cent, while open market operations bills (OMO) yield expanded 6 basis points in the week to 5.5%.
The financial system liquidity appeared robust with short term interest rates in the money market declining on Friday.
Better liquidity that supported open buy-back and overnight lending rates drop came following N60 billion inflows from OMO maturities which offset funding pressures for Central Bank weekly FX auction.
On December 31, the Overnight rate decreased by 0.75 per cent to close at 10.50 per cent as against the last close of 11.25 per cent. Also, the Open Repo (OPR) rate remained unchanged at 10.00 per cent.
Trading activities were quiet in the fixed income market as investors sustain buying activities. On the last trading day in 2021, the T-Bills secondary market closed on a flat note with the average yield across the curve remaining unchanged at 4.43 per cent.
Average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.38 per cent, 3.90 per cent, and 5.25 per cent, respectively, according to FSDH Capital note.
With the sustained buying interest, analysts at Cordros Capital sees yield clearing lower in the new week following moderation in the stop rate on 364-day T-Bills at the last primary market auction.
At Wednesday’s Nigerian Treasury Bills primary market auction, the CBN offered N52.31 billion worth of instruments for sale to market participants and demand at this auction was strong with a subscription level of N82.25 billion (Bid-offer ratio: 1.6).
Eventually, the CBN allotted N52.76 billion – N2.49 billion of the 91-Day, N2.16 billion of the 182-Day and N48.11 billion of the 364-Day bills with respective stop rates of 2.49% (unchanged), 3.45% (unchanged), and 4.90% (previously 5.00%).
In the OMO bills market, the average yield across the curve closed flat at 5.50 per cent. Average yields across short-term and long-term maturities remained unchanged at 5.50 per cent and 5.52 per cent, respectively.
FGN bonds secondary market closed on a flat as the average bond yield across the curve closed flat at 8.09 per cent. Average yields across short tenor, medium tenor, and long tenor of the curve closed flat.
The 27-APR-2023 and 14-MAR-2024 maturity bonds witnessed mild buying interest with a decrease in the yield of 1 basis point each. Going into next week, FSDH Capital predicted that the secondary bond market is likely to remain subdued in the short term.
#Yield on Treasury Bills Ends 2021 at 4.43%, OMO 5.5% >>> Read Also: Treasury Yield Prints at 4.50% as Demand for Short-Term Bills
