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T-bill Yields Stay Flat as CBN resumes OMO

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Monday, March 05, 2017 10:10 PM /Zedcrest Capital

***CBN Awaits Senate’s Clearance for MPC Meeting***

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Bonds

The bond market maintained its flattish trend in today’s session with continued buy interests on the long end (2037s) offset by some sell on the 2026 bond. Yields consequently inched higher by c.1bp on average. We expect another quiet trading session tomorrow, but with slight decline in yields due to expectations of continued interests on the long end.


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Treasury Bills

The T-bills market also traded flat in today’s session, as the CBN resumed its OMO interventions with c.N693m 94-days and N89.25bn 227-days bill sold at 12.60% and 14.40% respectively. We however witnessed slight demand for some short tenured maturities as system liquidity remained positive at c.N100bn despite the OMO sales. We also witnessed slight compression on the long end Jan-19 bills as offers remain very thin relative to demand for them. We expect yields to inch slightly higher tomorrow, as the CBN is expected to continue with its OMO interventions, further tightening liquidity in the market.


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Money Market

The OBB and OVN rates inched higher to close at 11.67% and 12.67%, as the CBN mopped up c.N90bn of system liquidity via an OMO T-bill sale. We expect rates to inch further upwards tomorrow, due to expectations of another OMO auction by the CBN.


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FX Market

The CBN Official spot rate remained stable at its previous rate of N305.85/$. Its external reserves is also recorded to have improved by 1.65% to $42.76bn as of 2 March.

The spot rate in the Investors and Exporters’ FX Window depreciated marginally by 0.003% to close at N360.10/$ from N360.09/$ in the previous session.

Rates in the Unofficial market also depreciated by 0.03% to N361.00/$ from its previous rate of N360.90/$.

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Information on all Nigerian bonds are available here

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