N553.84bn T-Bills maturities to keep rates moderate

THERE are indications that a total of N553.84 billion Treasury Bills maturities will boost liquidity in the system and cause moderation in interbank rates.

Also, dealers from Afrinvest Securities said there are expectations that the Central Bank of Nigeria (CBN) will keep liquidity in check through regular auctions, albeit at higher rates, given Open Market Operations (OMO) maturities of N204.1billion expected this week.

A herd of analysts said CBN has been promoting pro-growth strategies recently, while letting market interest rates fall to a shade over the inflation rate. They said the  problem with this strategy is that the market might question the CBN’s determination to hold the exchange rate, even with its high levels of foreign reserves. Market interest rates moved sharply back up in mid-August, showing the CBN is alert to the issue. Dealers from Zedcrest Capital Limited said

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the T-bills market traded on a relatively flat note, with only slightly buying interest observed on the short end of the curve (Sep – Jan).

It added that the Mid to long end of the curve remained quiet, as market players awaited results from the CBN’s OMO auction.

“We expect yields to remain pressured in the coming week, due to the higher clearing rate on the 1yr bill and with system liquidity being relatively squeezed by the CBN’s OMO and FX interventions,” the stated in a note to clients.