The latest data from the Central Bank of Nigeria revealed that the Nigeria’s 364-day treasury bills have fallen to 4.6%. While the 90-day treasury bills current stop rate sold for 2.3%, the 182- day treasury bills sold for 3.4%.
The National Bureau of Statistics latest consumer price index revealed Nigeria’s inflation rate was 12.2%, the highest in years. At 12.2% inflation rate Nigeria’s inflation adjusted real return for the 90-day treasury bills is about -11.9%.
Meanwhile, several Nigerians, especially stakeholders in the financial market, can not wait for the Monetary Policy Committee to meet from next Monday, March 20. No doubt, some of the burning issues that would inform certain decisions that would be taken are the crash of crude oil price, coronavirus and the Treasury Bills market among others.
Already, there are speculations that the MPC may review the decision the Central Bank of Nigeria took last October, when it banned individuals from operating in the Open Market Operations (OMO).
Why it matters: The Treasury Bill’s market has remained subdued with the bulk of the attention on the Primary Market Auction. Consequently, rates remained relatively unchanged to end the session.
The total amount on offer for 364-day bills was N37.17 billion with investors staking about N92.36 billion. The total amount on offer for 182 and 91-day were N8.36 billion and N2 billion, while investors staked N27.35 billion and N8.94 billion respectively.
Interbank rates eased further as system liquidity was supported by FGN coupon payment inflows of c.N90 billion over the last two days. OBB and overnight rates declined by 131 bps and 144 bps to close at 10.40% and 11.20% respectively. System liquidity is estimated to be c.N300 billion according to market sources.
The Bond market witnessed minimal activity in today’s trading session. We saw mixed sentiments across the different maturities albeit with minimal volumes traded. Consequently, yields rose by 6 bps on average across the curve.
At the parallel market, the naira remained unchanged against the dollar and the Euro at $1/₦380 and €1/₦415 respectively, while it depreciated against the Pound Sterling by N5.00 to close at ₤1/₦490.
At the Investors and Exporters’ FX Window, the local currency depreciated against the US dollar by ₦0.45 to close at $1/₦368.02 from $1/₦367.57.