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CBN Resumes OMO to offset Inflows from Maturing Bills


Thursday, February 22, 2018/ 05.50 PM/Zedcrest Capital

** Nigeria Urges Caution on Ecowas' Currency Integration Proposal***

 Proshare Nigeria Pvt. Ltd.


The Bond market traded on a relatively quiet note, with slight uptick witnessed on the 5-yr, while other traded bonds strengthened slightly, even as we witnessed trickles of demand come into the bond space. Yields consequently compressed by c.2bps, largely driven by slight buys on the 2027s (prev. 10-yr bond). We expect the market to close the week on a relatively calm note, as market players try to stay square on their holdings. We however maintain a bullish bias, with yields expected to have maxed out at current levels.

Proshare Nigeria Pvt. Ltd.


Treasury Bills

The T-bills space traded on a relatively flat note with a slight decline of c.7ps in average yields, following resumption of OMO by the CBN to mop up excess liquidity from c.N57bn maturing OMO bills. The CBN consequently sold c.N67bn of a 182-day bill, as market players came with no bids for the other 98-day bill offered. Rates were maintained at 14.40%, consequently calming the bullish pressures witnessed in the last two sessions. We expect yields to tick slightly higher tomorrow due to expected squeeze in system liquidity coming from expected debits for bond auction and possible OMO sales by the CBN.


 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates declined to 9.83% and 10.17% respectively, as inflows from OMO maturities helped offset outflows from the OMO auction sales by the CBN, consequently sustaining system liquidity at c. N160bn positive. We expect rates to inch slightly higher tomorrow due to anticipated outflows for bond auction settlement and possible OMO sales.

Proshare Nigeria Pvt. Ltd.


FX Market

The CBN Official spot rate rose sharply by 0.16% to N306.50/$ from N306.00/$ in the previous session. This was despite the accretion to external reserves by 1.69% to $41.82bn.

The spot rate in the Investors and Exporters’ FX Window also depreciated by 0.04% to close at N360.66/$ from N360.40/$ in the previous session.

Rates in the Unofficial market however appreciated by 0.03% to a two-year low of N360.70/$, from its previous rate of N360.80/$.

 Proshare Nigeria Pvt. Ltd.


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