CBN Auctions OMO as Dealers Expects Neutral Liquidity

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Central Bank of Nigeria, Abuja

There are high expectations among dealers that a Treasury Bills auction of N117.2 billion for all indicative tenors will neutral impact on liquidity balance given the scheduled maturity. However, an Open Market Operation (OMO) maturity of N53.4 billion is expected to buoy liquidity levels while we expect the CBN to mop up via OMO sales,” said in a statement by a dealer.

The Central Bank of Nigeria (CBN) is scheduled to hold a Treasury Bills(T-Bills) Primary Market Auction (PMA) on November 29, 2017.

T-bills worth N117.18 billion will mature in 91-day, 182-day, and 364-day instruments accordingly, while an equal sum is expected to be issued across the same tenors. The CBN is expected to auction N26.14 billion, N11.01 billion and N80.03 billion in the 91-day, 182-day, and 364-day instruments respectively.

According to Meristem Wealth Management Limited, the secondary market for treasury bills has been characterised by bearish sentiments since the last Primary Market Auction (PMA) on November 15, 2017. Sell pressures were witnessed on all instruments save for the 9-month (9M) instrument which recorded a yield decline of 0.29 per cent.The 1M, 3M, 6M and 12M instruments witnessed yield increases of 1.10 per cent, 0.20 per cent, 0.15 per cent and 0.11 per cent respectively.

Consequently, the average Treasury bills yield for the period advanced by 0.26 per cent, to settle at 17.29 per cent on November 23, 2017.