The Central Bank of Nigeria (CBN) will this week auction treasury bills worth N182.85 billion. This would be done through a primary market auction. The debt instrument to be auction would comprises 91-day billsworthN27.85 billion; 182-day bills worth N65billion; and 364-daybills worthN90 billion.
On the other hand, treasury bills worth N182.85 billion is expected to mature during the week. This would be via the primary market. The breakdown of the maturing bills shows that it would also consist of 91-day billsworthN27.85 billion; 182-day billsworthN65billion;and364-daybillsworthN90billion.
Analysts at Cowry Asset Management Limited anticipate that interbank rates would rise this week as “combined outflows via purchase of treasury notes and foreign exchange triggers liquidity strain in the absence of any major inflow.”
Meanwhile, the interbank money market commenced last week was highly liquid on the back of the Federation Accounts Allocation Committee (FAAC) sharing of funds among the three tiers of governments as well as the Open Market Operations (OMO) maturities. However, the CBN mopped up liquidity via OMO issuance last Monday.
While the CBN offered N70 billion, N249.3 billion was sold at a stop rate of 10.8 per cent for the 136 days OMO auction, a report by Afrinvest Securities Limited revealed.
This, along with the provisions made for last Monday’s Retail Dutch Auction System (RDAS) on Monday drove the benchmark Call and open buy back (OBB) rates higher by 17 basis points to 11 per cent and 10.8 per cent respectively on the first trading day of the week.
The lagging effect of the Monday liquidity mop up drove the Nigerian Interbank Offered Rates (NIBOR) Call and OBB rates higher by 21 basis points apiece to 11.2 per cent and 11 per cent apiece last Tuesday.
Nevertheless, week-on-week, the Call and OBB rates inched higher by 29 basis points each to 11.1 per cent and 10.9 per cent last Friday respectively
“We anticipate the maturity of treasury bills and simultaneously mops up with treasury bills issuances will stabilise liquidity levels in the system. Thus, we expect rates to trade flat within the week,” analysts at Afrinvest Securities Limited stated.