Analysis of the OMO offer revealed increased investors’ apathy for short dated bills and preference for long dated bills. While the N100 billion worth of 112-Days bills offered was grossly subscribed as investors demanded for N1.2 billion, with stop rate at 12.2 percent, the N400 billion worth of 245-Days bills recorded huge oversubscription as investors demanded for NN963.9 billion worth of bills, with stop rate at 13.99 percent.
This week, while there will be an inflow of N263.37 billion from maturing TBs, which is more than expected outflow through primary market TB sale of N58.49 billion, the CBN is expected to offer and sell more OMO bills so as at bring the volume of excess liquidity to appropriate levels.
In their projections for this week, Cowry Assets analysts stated: “This week, T-bills worth N263.37 billion will mature via both primary and secondary market which will more than offset the treasury bills worth N58.49 billion to be auctioned via the primary market; viz: 91-day bills worth N5.85 billion, 182-day bills worth N29.25 billion and 364-day bills worth N23.396 billion. Hence we expect sustained ease in financial system liquidity with concomitant moderation in interbank rate. This, however, should warrant increased OMO auctions in order to mop up excess liquidity.”
Naira depreciates as I&E turnover drops by 8.5%
On the foreign exchange scene, the naira depreciated in the parallel market and in the Investors and Exporters (I&E) window last week.
In the parallel market, the naira depreciated by N1 as the parallel market exchange rate rose to N363 per dollar last week from N362 per dollar the previous week.
In the I&E window, the naira depreciated by 31 kobo, as the indicative exchange rate of the window rose to N360.32 per dollar last week from N360.01 per dollar the previous week.
Financial Vanguard analysis also showed that volume of dollars traded in the window dropped by 8.5 percent to $1.17 billion last week from N1.28 billion the previous week.
The CBN however sustained its weekly intervention in the foreign exchange market, as it injected $210 million through the interbank foreign exchange market. According to the apex bank, $100 million was allocated to the wholesale segment, while the SME window and invisibles each received $55 million.