By Chima Nwokoji | Lagos
There are expectations that activity in the money market will be bullish as the market expects a liquidity boost from the maturing N154.12 billion worth of Treasury and Open Market Operation (OMO) bills.
Also, dealers expect local over-the-counter (OTC) bond prices to appreciate (and yields to moderate) amid an expected boost in financial system liquidity.
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Meanwhile, the average yield on Nigerian Treasury Bills continues to fall rapidly amidst a sustained rally across the tenor.
Yield tumbles to 1.5 percent across the tenor following a large decline in spot rates offered by the Central Bank of Nigeria (CBN) at the primary market auction last week.
The auction result indicated that CBN allotted T-bills worth N220.53 billion to fully refinance the N198.34 billion worth of matured Treasury bills. The demand came stronger than anticipated, forcing lower spot rates across 91-day, 181-day and 364-day bills.
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The sum offered to investors was split into N1.74 billion for the 91-day, N1.26 billion for the 182-day, and N217.53 billion for the 364-day bills. Investors’ total demand was valued at N959.39 billion against CBN offer worth N220.53 billion while demand for longer-dated bills was valued at N860.35 billion – 89.7 percent of the total subscription.
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The apex bank allotted exactly the sum it offered for sale, thus stop rate for all of the maturities declined. Specifically, 364-day bills fell further to 4.78 percent from 7.30 percent. Also, 91-day bill and 182-day bill rates fell to 0.29 percent from 2.00 percent and 1.80 percent from 4.33 percent, respectively.
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