Treasury bills maturity of 91-day and 182-day worth N62.4billion are expected to hit the market this week. However, the maturing fixed income is expected to be offset by a rollover of the same amount while an open market operation (OMO) maturity of N168.1 billion is also expected to hit the system this week.
Analysts at Afrinvest West Africa Limited stated this in a report at the weekend, expressing optimism that the move would impact liquidity dynamics great deal. But, they held the view that the aggressive liquidity mop-up signal of the Central Bank of Nigeria (CBN), would keep the open buy back (OBB) and overnight rates in check.
Financial system liquidity stayed negative on all trading days of trading last week, owing to increased primary market issuances and the Retail SMIS (Secondary Market Intervention Sales) foreign exchange auction conducted by the CBN during the week.
The CBN mopped up a total of N28.6 billion in OMO sales on four of five trading days of the week which hampered system liquidity. Thus, open buy back and overnight lending rates remained in double digits from the start of the week before rising to 105.0% and 107.8% last Wednesday from 25.0% and 26.3% respectively in the previous trading day. OBB and overnight rates dropped 58.3 percentage points and 55.6 percentage points to 46.7% and 52.2% respectively on Thursday as a result of an OMO maturity inflow of N113.05 billion into the system. Consequently, rates closed at 55.8% and 59.3% on Friday, up 33.8 percentage points and 36.8 percentage points week-on-week respectively.