Rates to remain unchanged, despite N261.9bn OMO maturity

THERE are high expectations among dealers that despite an Open Market Operation (OMO) maturity of N261.9 billion, rates to will remain at last week’s levels as the Central Bank of Nigeria (CBN) continues its OMO auctions to mop up excess liquidity.

Average rate closed last week at 13.9 per cent, indicating a 3 basis points (bps) week on week (W-o-W) decline.

Dealers from Zedcrest Capital Limited stated in a note to investors on Friday that the Treasury Bills market traded on relatively calm note with slight buy interests observed on some short and medium tenured maturities, in absence of an OMO auction by the CBN.

It said yields, however, stayed relatively flat as most market players do not expect any significant change in OMO issuance by the CBN.

Market players according to the firm, will this week shift their focus to the much anticipated Nigeria T-Bills (NTB) calendar, as “we anticipate the likely impact of the Eurobond sale by the DMO, whilst noting that the DMO cut its last NTB issuance after the Eurobond launch in half,” the dealers said.

The Open Buy Back (OBB) and Overnight (OVN) rates declined slightly to close the week at 8.50 per cent and 9.17per cent respectively, as there were no significant pressures on system Liquidity estimated to close the week at N180billion positive.

However, other dealers expect rates to inch slightly higher on Monday due to expected OMO and wholesale FX sales, which should however be moderated by expected inflows from retail FX refunds to banks by the CBN.