CBN to auction N34bn T-bills today
The Central Bank of Nigeria is on Wednesday billed to auction N 34 bn worth of Treasury bills, 14 , roll over existing Federal Government T -bill maturities .
Analysts at Zedcrest Capital Limited said upon resumption from the Salah break , despite the small volume of T -bills on offer, they expected stop rates to clear above their previous level due to the recent bearish trend in the market .
The FGN bond market closed last week on a relatively calm note, having witnessed significant sell-offs earlier in the week , which lifted yields higher by 50 basis points week -on -week .
Yields , however, dropped marginally by three basis points , following renewed demand on the long end of the curve , with the most interest witnessed on the FGN 2034 bond .
Analysts at Zedcrest said, “ This week , we expect continued demand from local investors to place a slight downward pressure on yields , following expectation for a continued downtrend in the July inflation figure and coupon payment of N 47 bn to be paid on the FGN 2020 bond .”
They said their prediction was , however, barring a continued escalation in the global externalities witnessed earlier last week .
The T - bills market remained firmly bearish as offshore sell- offs persisted across most of the short - and mid -tenured bills.
Yields trended higher by 25 bps , culminating in a 135 bps week - on- week rise in the average Nigerian Treasury Bills yields .
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Rates in the money market remained elevated at double digit levels , as system liquidity remained depressed due to the continued foreign exchange interventions by the CBN in the Investors ’ and Exporters ’ FX window .
The Open Buy Back and overnight rates consequently closed six per cent higher week -on - week at 12 .14 per cent and 12 .86 per cent , respectively .
Analysts said they expected the rates to remain elevated this week , due to expected funding pressures from a likely wholesale and retail FX interventions by the CBN .
At the interbank, the naira / dollar rate remained unchanged at N 360 .90 / $ ( spot ) and N 357. 68 / $ ( retail secondary market intervention sales ) .
The Nigerian Autonomous Foreign Exchange rate at the I& E window rose further by 13 kobo to a six-month high of N 363 .44 / $ due to continued profit-taking on T -bills by offshore investors.
At the parallel market , the cash rate decreased by 20 kobo to N 357 . 80 / $ , while the transfer rate increased by 50 kobo to N 363. 00 / $ .