Financial market watchers have said that the inter-bank rates will drop further this week as a result of excess liquidity in the market.

Analysts at FSDH, in a report made available to our correspondent, said, “We expect Open Market Operation maturity of about N249.70bn to hit the system in the coming week. As a result of the anticipated injection into the system we expect the Central Bank of Nigeria to use OMO to mop up some of the liquidity in the market.

“Also, we expect FGN Bond Re-opening auctions of about N70bn (15.10 per cent FGN April 2017 and 16.39 per cent FGN January 2022) to take place in the market in the coming week. We expect inter-bank rates to drop further because of the liquidity in the market.”

The inter-bank rates moderated downward to end last week. The market was relatively liquid last week despite the withdrawal of about N186.26bn via the government securities market and foreign exchange sales by the CBN.

At the inter-bank market, the seven-day Nigerian Inter-Bank Offered Rate closed last week lower at 10.59 per cent, representing a 12-basis point decrease from the previous week’s figure of 10.71 per cent.

The 90-day NIBOR closed unchanged from the previous week at 11.63 per cent.

At the 91-day Treasury Bill auction, a total of N32.97bn worth of securities was offered and sold to competitive bidders. A total of N24.96bn was sold to non-competitive bidders, bringing total offer and sale to N57.93bn.

The bill was 123.12 per cent subscribed, as N40.59bn worth of bid was received from competitive bids. The bill was issued at a discount rate of 9.20 per cent.

A total of N32.97bn worth of matured bills was repaid into the system, leading to a net outflow of N24.96bn from this segment of the market.

At the 182-day TB auction, a total of N40bn worth of securities was offered and sold to competitive bidders. Also, a total of N30.33bn was sold to non-competitive bidders, bringing the total offer and sale to N70.33bn.

Source: Punch (By Ademola Alawiye)