CBN’s N35bn T-Bills auction raises NIBOR rate to 21.24%

By Ihesiulo Grace

16 October 2017

The Central Bank f Nigeria’s (CBN’s) OMO auction, Friday’s selling N35billion worth of 181-day Treasury bills at 17.84 per cent coupon, impact on money market rates last week as the new week opens on fresh expectations.

Following the T-Bill auction, the 1month NIBOR rate inched up 10bps to 21.24 per cent, which market analysts attributed to the OMO auction
Also, money market rates closed mixed with the 3month and 6month rates declining by 18bps and 48bps to 21.60 per cent and 23.02 per cent respectively, as stop rates.

Activities in the money market during the week ended 13th October, 2017, showed that yield movement was mixed in the bond market today as investors were bullish at the short end of the curve; while we noticed some profit taking on yesterday’s gains on long dated maturities. Yield on the 5yr benchmark bond fell by -35bps to 14.76%; while the yield on the 10yr benchmark bond inched up 3bps to 14.88%. Yield on the 7yr benchmark bond was unchanged at 14.96 per cent.

In the near term, experts forecast that activities in the bond market will continue to be influenced by liquidity levels and foreign investors’ participation.

Meanwhile, at the Import Export foreign exchange (IEFX) window, the local currency was relatively flat at N360.43 against the USD and N426.29 against the EUR. However, the NGN shed -1.00 per cent to N478.80 against the GBP.

While the NGN remained unchanged at N363 against the USD and N425 against the EUR, it depreciated by -1.04% to N480 against the GBP.
In the near term, we expect the local currency to continue to see support from the CBN’s intervention.