Stop Rates Moderate Further for Most Macturites amid Sustained Flight to Safety…

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In line with our expectation, CBN refinanced N158.71 billion T-bills which matured via the primary market at lower stop rates for most maturities amid demanded pressure.

Specifically, stop rates for 91-day and 182-day bills rose to 1.09% (from 1.10%) and 1.50% (from 1.55%) respectively.

However, 364-day bill was flattish at
3.05%. Also, the additional N350.00 billion worth of T-bills which matured via OMO re7623sulted in a total net inflow of N350.00 billion.

Hence, given the boost in financial system liquidity, NIBOR for Overnight funds crashed to 1.88% (from 15.95%).

However, NIBOR for 1 month, 3 months and 6 months rose slightly to 2.60% (from 2.48%), 2.83% (from 2.67%) and 3.12% (from 2.93%) respectively.

Meanwhile, NITTY fell for most maturities tracked in tandem with the fall in stop rates: yields on 1 month, 3 months and 12 months maturities moderated to 0.98% (from 1.01%), 1.18% (from 1.19%) and 2.79% (from 2.90%) respectively.

However, yield on 6 months maturity rose to 1.55% (from 1.37%).

In the new week, we expect Naira to stabilize against the USD, especially at the Bureau De Change market, amid CBN’s increasing capacity to intervene; hence, the positive impact could trickle down to the parallel (“black”) window.

The external reserves moved northward in the month of September – rising by 0.42% to USD35.81 billion as at September 17, 2020 down from USD35.66 billion.

In the new week, treasury bills worth N300.00 billion will mature via OMO; hence, we expect interbank rates to further moderate amid anticipated boost in financial system liquidity.

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