The latest data from the Central Bank of Nigeria revealed that Nigeria’s 364-day T-bills fell 4.6%. While the current stop rate for 90-day T-bills sold at 2.3%, 182-day T-bills sold at 3.4%.
The latest consumer price index from the National Bureau of Statistics found Nigeria’s inflation rate to be 12.2%, the highest in years. At an inflation rate of 12.2%, Nigeria’s inflation-adjusted real yield on 90-day T-bills is approximately -11.9%.
Meanwhile, many Nigerians, especially financial market players, cannot wait for the Monetary Policy Committee to meet from Monday, March 20. crude oil prices, coronavirus, and treasury bill market, among others.
Already, there is speculation that the MPC may revisit the decision taken by the Central Bank of Nigeria last October, when it banned individuals from trading in Open Market Operations (OMO).
Why is this important: The treasury bill market remained calm with most of the attention on the primary market auction. As a result, rates were relatively unchanged to end the session.
READ ALSO: UPDATE: Inflation rate in Nigeria hits 12.2% as food index rises
The total amount proposed for 364-day bills was 37.17 billion naira, with investors putting into play around 92.36 billion naira. The total amount proposed for 182 and 91 days was 8.36 billion naira and 2 billion naira, while investors bet 27.35 billion naira and 8.94 billion naira respectively.
Interbank rates have eased further, as system liquidity has been bolstered by influxes of NGN 90 billion FGN coupon payments over the past two days. OBB and overnight rates declined 131 bps and 144 bps to close at 10.40% and 11.20% respectively. The liquidity of the system is estimated at 300 billion naira according to market sources.
The bond market saw minimal activity during today’s trading session. We have seen mixed feelings on the various maturities, albeit with minimal volumes traded. As a result, rates rose 6bp on average across the curve.
In the parallel market, the naira remained unchanged against the dollar and the euro at $ 1 / ₦ 380 and € 1 / ₦ 415 respectively, while it depreciated against the pound sterling by N5.00 to close at ₤ 1 / ₦ 490.
At the foreign exchange counter for investors and exporters, the local currency depreciated against the US dollar by 0.45 ₦ to close at $ 1 / 368.02 versus $ 1 / ₦ 367.57.