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CBN Moderates System Liquidity with c.N250bn OMO Sales ahead of T-bills PMA


Tuesday, February 27, 2018/ 07.50 PM/Zedcrest Capital

***Nigeria’s Q4 GDP Growth up 1.92% Y-o-Y***

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The bond market remained scantily traded in today’s session, following release of the Q4 GDP figures which were largely in line with market expectations.  We however witnessed some offshore interests on the 20-yr, consequently compressing yields by c.2bps on average. We expect another quiet trading session tomorrow, as market players shift their focus to the final PMA on the Q1 NTB Calendar.

Proshare Nigeria Pvt. Ltd.


Treasury Bills

The T-bills market traded on a relatively flat note, as a significant OMO sale of c.N250bn of a 254-day bill by the CBN stifled buying interest which could have been spurred by significant inflows from FAAC payments (c.N305bn) into the system. Average T-bills Yields consequently inched slightly higher by c.5bps, as market players sold off some short tenured bills in favor of OMO. We expect slight buying interests tomorrow, in anticipation of c.N109bn OMO T-bill maturities on Thursday. 

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There will be an NTB auction tomorrow with N7.89bn, N30bn and N222.08bn worth of 91, 182 and 364 day bills on offer. We expect rates to clear at the following levels:


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Money Market

The OBB and OVN rates declined to 5.00% and 5.57% respectively. This was following significant inflows from FAAC and retail FX refunds estimated to bolster system liquidity to c.N350bn positive, having accounted for debits for c.N250bn OMO sales. We consequently expect rates to decline further tomorrow, as there are no significant outflows expected from the system. 

 Proshare Nigeria Pvt. Ltd.

FX Market

The CBN Official spot rate appreciated slightly by 0.02% to N305.90/$ from its previous rate of N305.95/$.

The spot rate in the Investors and Exporters’ FX Window also appreciated marginally by 0.14% to close at N360.15/$ from N360.19/$ in the previous session.

Rates in the Unofficial market however remained stable at its previous rate of N361.00/$.

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Related News

1. Funding Rates decline on FAAC Expectations

2. Robust System Liquidity to Drive Buying Interest as PMA holds on Wednesday

3. Summary of Nigeria''s USD2.5 Billion Eurobonds Priced in February 2018

4. Bond yields close positive on renewed local interest

5. A little Breathing Space for the DMO

6. CBN Resumes OMO to offset Inflows from Maturing Bills

7. Summary of FGN Bond Auction Results for February 2018

8. DMO Sells N52bn of New-10 Year Bond at 13.98% Marginal Rate

9. T-bill Yields Decline as CBN Maintains Hold on OMO


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