The Central Bank of Nigeria conducted the first Treasury bills primary market auction for the second quarter on Tuesday, offering a total of N95.7bn (roll-over of total maturing bills) across the 91-, 182- and 364-day instruments.
It was expected that the CBN would resume its excess liquidity mop-up via Open Market Operation auctions, especially due to Treasury bills maturities worth N95.7bn.
In a note on Monday, they said, “We do not rule out the possibility of a further moderation in the discount rate on T-bills and OMO bills instruments following the Monetary Policy Rate cut and the absence of CBN’s OMO auction.”
The bearish sentiments in the Treasury bills secondary market was reversed last week as average yields across all tenors declined by 11 basis points week-on-week to settle at 13.6 per cent on Friday.
The uptick in investor sentiment was largely supported by the inflow of liquidity from matured OMO bills amid the surprising absence of the CBN’s OMO auction all through the week.
As a result, most investors took positions in the secondary market, particularly along the medium- and long-end of the curve with the 18-Jun-19, 20-Jun-19 and 23-Jan-20 maturities enjoying significant buying interests.