Market Update: CBN sells dollars to offshore, interbank rate up, new TBills sales
The CBN intervened at the Investors and Exporters window last week, selling some USD to foreign portfolio investors seeking to exit their NGN positions. As a result, NAFEX closed marginally stronger at N385.64 per dollar.
Otherwise, liquidity from other sources remains relatively weak at the I&E segment of the market,
with demand still strong.
The Central Bank released the results of the last Retail SMIS auction on Friday, September 4, 2020.
Overnight rates averaged about 8 percent last week, up from 2.50 percent in the previous week due to tighter money market liquidity. Overnight rates opened the week at 14.90 percent and closed at the week-low of 3.00 percent.
There were some sellers on longer tenor bills at the start of last week, but as the week progressed, more buyers emerged. As a result, discount rates stayed flat week-on-week.
An OMO auction was held on Thursday where a total of N100bn across the 82-day, 180-day and 355-day bills was offered and sold at 4.86 percent, 7.68 percent and 8.94 percent respectively. Marginal rates matched expectations.
The Debt Management Office (DMO) will offer about NGN128 billion-worth of Treasury Bills, on behalf of the Federal Government of Nigeria, at its Nigeria Treasury Bills (NTB) Auction scheduled to hold this week.
The DMO will offer NGN4.41billion of the 91-day bills, NGN14.0billion of the 182-day paper and N109.65 billion of the 1-year Treasury instrument at the session on Wednesday, September 9, 2020.
The bills will settle on Thursday, September 10, 2020.
FGN bonds traded sideways this week with small pockets of buying and selling interests seen across
various points on the curve. Bond yields declined by an average of 2.5 bps across board week-on-week.
-Sources Citibank, Lagos