Financial system liquidity closed at N222.3bn in March —Assets managers

ASSETS managers from Cowry Assets Management Limited, over the weekend, disclosed that from N36.1 billion in the previous month, the financial system liquidity closed at a whooping N222.3 billion in March, 2022.

As a result of this, they said, funding rates fell as the overnight rates (OVN) declined 7.3 percentage points (ppts) to print at 5.0 per cent at the end of March.

Meanwhile, the managers said they expect activity in the money market to be bearish amid limited maturing treasury and Open Market Operation (OMO) bills this week.

Investors who won the auctions are expected to dispose of them amid anticipation of rising rates in a fortnight, they hinted.

Also, dealers expect to see bearish activity in the Federal Government (FGN) bond space amid rising yields in the money market as the 364-day Nigeria Treasury Bills (NTB) auction was done at 45 basis points (bps) higher from the previous stop rate of 4.00 per cent.

According to dealers from Cowry Assets Management, last month, system liquidity was robust in March as OMO repayment (N317.5 billion) and Primary Market Repayment (N484.3 billion) hit the system, although, NTB (N410.7 billion) and OMO auctions (N120.0 billion) were conducted.

Similarly, in recent times, the ongoing geopolitical tension between Russia and Ukraine have roiled oil markets, leading to a spike in prices and threatening a critical shortfall in crude and other petroleum products. Additionally, dealers said they witnessed the US ban on Russian oil imports while Britain indicated interest in phasing them out by year-end.

Consequently, the Energy Information Administration (EIA) projected average Brent spot price to $105.22/bbl. in 2022, an upward revision of $22.35 from the prior month’s forecast.

On the domestic front, the spike in crude oil prices has not translated to an accretion in external reserves as it declined 0.8 per cent m/m to $39.6 billion.