Yields Steady as Nigerian Naira Hits N441.50
The average yields on Nigerian government debt instruments trading in the fixed income market remained steady as the local currency depreciated further on Wednesday.
The naira depreciated by 0.1% to 441.50 against the United States dollar at the Investors’ and Exporters’ foreign exchange (FX) window.
Meanwhile, the money market is still faced with liquidity drag which continues to impact short-term rates across tenor buckets.
Interest rate pricing has adjusted upward since the monetary authority’s hawkish pose which started in May 2022.
Trading data from the FMDQ Exchange showed that the overnight lending rate was unchanged at 16.5%, as the average system liquidity remained at a net short position, closing at N238.06 billion, according to Cordros Capital market report.
As a result, fixed income market transaction levels have also been adjusted to the liquidity position in the segment. MarketForces Africa reported that Nigeria’s debt office was unable to raise N225 billion from bonds auction on Monday.
The subscription level was unimpressive at N107 billion and now the government is planning to securitize N20 trillion ways and means advances collected in tranches from the central bank.
More likely, Nigeria’s debt managers are expected to offer juicy rates on the proposed securities to attract investors in the debt capital market. READ:Yields Steady as Treasury Bills, Bonds Trade Quiet
On the downside, while the Nigerian deposit money banks continue to battle with persistent cash reserve ratio debits and associated impacts on funding profiles, the apex bank also tightens its nose around the discount window for authorised dealers.
Banks have been noted to pitch tents in the CBN standing lending facility to meet their liquidity requirement while cash-rich local banks demand higher rates to free up excess cash.
Market analysts’ notes showed that trading in the Treasury bills secondary market was muted, as the average yield was unchanged at 9.9%.
Similarly, the average yield maintained its previous day’s position of 10.3% in the OMO bills segment, according to traders.
In the bond market, trading activities ended on Wednesday cold and quiet, as the average yield closed flat at 14.0% amidst an unsettled debt restructuring statement by the finance minister.
# Yields Steady as Nigerian Naira Hits N441.50#+
