Rates May Trend Lower, Amidst N550bn Liquidity In Interbank Market

Liquidity at the Nigerian interbank market remained significantly buoyant at N550bn on Tuesday, following which analysts expect rates to trend lower, just as market players anticipate inflows from retail FX refunds.
The Interbank rate appreciated slightly by 0.02% to N305.55/$ with the CBN’s FX reserves recorded to have improved by 1.51% to $46.55bn. The OBB and Overnight rates however fell lower to 2.83% and 3.42%.

Bond market

Ahead of the release of the March 2018 inflation data on Monday, April 16, by the National Bureau of Statistics (NBS), players speculate drop in rate, a situation that led to investors repositioning their respective portfolios, following which Nigeria’s bond market was relatively flat at Tuesday’s session.
There was however slight demand on the buy side for 2021 maturities, as well as the sell side for 2027 and 2037 maturities.
The market is expected to be bullish at mid-week’s session, owing to the inflow of funds into the banking system.
Tuesday’s yield curve was flat across tradable maturities.

Treasury Bills
The buy side was the heaviest on most tradable bills as yield dropped to close at an average of 14%, riding on the back of the anticipated inflows from retail refunds.
The bullish trend is expected to persist, even as mixed market is expected at the midweek resulting from OMO maturities by the CBN on Thursday.
Previous NTB auction result for April 4th 2018 were 11.75,12.70 and 13.04 respectively for 91,182 and 364days.

By Judith idialu