Rates to moderate on expected N171.1bn OMO maturities

FOLLOWING anticipated Open Market Operations (OMO) maturities worth N171.1 billion on Thursday, there are expectations that money market rates could moderate, even as other dealers said they expect weak demand on the short end as investors remain attracted to longer tenor securities.

“Although we are yet to see the auction calendar from the CBN, we also expect the primary market auction of T-Bills to impact system liquidity,” one dealer noted.

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The CBN held off on conducting an OMO auction on Friday, June  7, even as system liquidity currently stands at N249.34 billion. The Interbank Call rate advanced by 500 basis points (bps) to 10.00 per cent says analysts at Vetiva Capital Limited.

Trading activity in the secondary Treasury bills market was largely sell-side driven, with activity concentrated at the mid-long end of the spectrum.

According to the Vetiva analysts, with system liquidity at a decent level of N249 billion, “We expect slightly improved sentiment in the T-bills market at week open. However, we expect mixed to negative trading for the remainder of the week as market participants keep an eye on the Primary Market Auction (PMA) scheduled to hold on Thursday.”