TRIBUNE
The Central Bank of Nigeria (CBN) last week debited commercial banks over N700 billion (as surveyed), speculatively based on Lending Deposit Rate (LDR) guidelines, which depleted liquidity.
Financial market participants said system liquidity improved significantly to open at N1.29 trillion on Wednesday. Consequently, open repo and overnight rates expanded by 130 basis points (bps) and 155 bps, respectively.
Dealers expect interbank rates to remain at their current level.
Buyers were active in the treasury bills market last week, particularly with the September bills gaining attention; trades were executed around 10.30 percent (+/- 10 bps).
Cowry Assets Management Limited, as one of the dealers, noted that some activities also occurred in the March bills, at an average of 6.60 percent. Overall, the March, June and September bills saw the highest trading.
“However, the special bill market remained quiet, with only a few transactions taking place during the session.
The bond market opened on a calm note on Thursday, featuring cherry-picking on the short end and sideways trading on longer-dated papers,” the firm further stated.
Upon the release of the primary market auction calendar for fourth quarter (Q4), where the Debt Management Office (DMO) plans to borrow up to N400 billion monthly on the 2029s, 2033s, 2038s and 2053s, selling pressure was witnessed, skewed to the long end of the bond curve. The 2027s, 2028s, 2037s and 2053s were thus the most active on the day,” dealers at Cowry Assets Management Limited stated.
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