Maturity of N198bn OMO to beef negative liquidity – Experts
Against the prevailing los liquidity in the system which closed trading Monday negative at N175 billion, experts have predicted that expected maturity of the Open Market Operation (OMO) N198 billion on Thursday February 2017, will lift liquidity.
System liquidity which closed negative at N175billion on Monday, drove money market rates down as both open buy back (OBB) and OVN closed at 20 per cent and 21 per cent levels respectively.
The low system liquidity, market experts say, has led to low pricing of market instruments, even as foreign exchange pressure on the naira continue to sustain push on the local currency.
Meanwhile analyst, projected that with the expected maturity of N198b OMO maturity on Thursday February 23rd, 2017, system liquidity would ease up. Thus easing liquidity freeze and boosting vibrancy of the money and debt instrument markets.
Low liquidity, experts maintained, is likely to lead to contraction in rates in the absence of OMO auction by the CBN.
However, in response to limited system liquidity on Monday, yields on FGN bonds inched up slightly across all tenors with both JUN 2019 and MAR 2036 the two exceptions as yields on both tenors contracted by 3bps and 4 bps to settle at 15 .87% and 16.46% respectively.
Overall, yields on the 5yr, 7yr and 10yr benchmark bonds gained 2bps, 5bps and 1bp to settle at 15. 91% per cent, 15.93 per cent and 16.21% respectively, as experts expect activity in subsequent session to be influenced by liquidity level
The continued pressure on the naira was sustained on Monday as at the parallel market, the local currency depreciated by -0.03 percent against the Dollar to N518 per Dollar, -0.08 per cent against the Greta Britain Pounds to close N630 per GBP and also lost -0.07 per cent against the USD, GBP and EUR to settle at N542 per Euro.
However at the interbank market, the Naira recorded a marginal +0.08 per cent gain against the USD to close at N305.25 .It however shed -0.33 per cent against the GBP to berth at N392.12 while rising +0.13 per cent against the EUR to berth at N333.94.
