Nigeria T-Bills Yield Sinks Ahead of CBN Auction
The average yield on Nigerian Treasury bills (NTB) slumped by 26 basis points to close at 10.50% on Friday ahead of the midweek auction by the Central Bank of Nigeria (CBN).
On Wednesday, the apex bank will be refinancing maturing treasury bills worth more than N104 billion as part of an effort to maintain balance in the financial system’s liquidity level. The secondary market registered increased demand from investors, this caused yield to slide across related tenors.
Traders noted interest among market participants towards both short and long-tenor bills, which was also fuelled by robust system liquidity. Due to a robust liquidity level of more than N346 billion in the money market, short-term benchmark rates declined.
Key money market rates, including the open repo rate (OPR) and overnight lending rate (OVN), experienced upward trends on Friday, reaching 15.75% and 16.32%, respectively.
A review of traders’ notes showed the average benchmark yield on Nigerian Treasury bills declined by 26 basis points to close at 10.50% from 10.76% recorded in the past week.
In detail, buying interests were predominantly seen on the 7-MAR-24, 22-FEB-24, and 21-NOV-24 maturity which expanded by 61bps, 35bps, and 50bps to close at 7.08%, 6.24%, and 14.50% week on week respectively, Afrinvest said in a market update.
On the other hand, the mid-end closed relatively flat for the week. For the new week, fixed interest securities analysts envisage a sustained bullish trend, barring any significant downturn in liquidity.
At the primary market auction on Wednesday, the Central Bank will roll over N104.36 billion of maturing bills. The offer will be split across three tenors: 91-day, 182-day and 364-day. #Nigeria T-Bills Yield Sinks Ahead of CBN Auction
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