Nume Ekeghe
Nigeria’s banking system is anticipated to obtain N2.858 trillion in recent liquidity inflows this week, pushed largely by maturing Open Market Operations (OMO) payments, Treasury payments maturities and different primary-market repayments, in line with the Financial Markets Dealers Association (FMDA).
This is in line with Financial Market Dealers Association (FMDA) weekly market report, which additionally projected OMO maturities of N2.067 trillion, whereas Treasury payments maturities are anticipated to contribute N392.792 billion. Federal Government of Nigeria (FGN) bond coupons are projected at N349.838 billion.
Other anticipated inflows embody N42.872 billion from industrial paper maturities and N5.25 billion from company bond coupons.
The report additionally recognized a possible N2.43 trillion Federation Account Allocation Committee (FAAC) disbursement to the federal, state and native governments as an extra supply of liquidity.
However, the Debt Management Office’s (DMO) N1.75 trillion FGN bond public sale scheduled for October 19, involving the reopening of the February 2034, September 2036 and June 2038 bonds, was recognized as the primary scheduled drain on liquidity.
The projected inflows comply with a major improve in banking system liquidity within the earlier week. According to FMDA, liquidity rose by 69.39 per cent week-on-week to N6.283 trillion from N3.709 trillion.
The report attributed the rise largely to N2.409 trillion in OMO maturities, alongside N80.84 billion in Treasury payments maturities and N30.20 billion in different primary-market repayments. The DMO’s N269.06 billion Treasury payments sale partially offset the inflows.
The report acknowledged: “System liquidity rose 69.39% w/w to N6.283trn from N3.709trn, driven largely by N2.41trn of OMO maturities (with no offsetting OMO sale last week, only repayments), alongside N80.84bn of T-bill maturities and a further N30.20bn of other primary-market repayments, even as the DMO’s N269.06bn T-bill sale partially offset the inflows.”
Meanwhile, Nigeria’s gross exterior reserves rose by 0.02 per cent week-on-week to $55.089 billion, reaching a recent excessive since December 2008.
The report acknowledged that common Brent crude costs elevated by 3.92 per cent week-on-week to $106.02 per barrel, additional supporting Nigeria’s exterior place.
In the international alternate market, the naira depreciated marginally by 0.06 per cent week-on-week to N1,332.31 per greenback on the Nigerian Foreign Exchange Market (NFEM), whereas the parallel market price remained unchanged at N1,375 per greenback.
NFEM interbank turnover rose by 14.08 per cent week-on-week to $1.08 billion.
In the fixed-income market, common FGN bond yields elevated by 32 foundation factors to 16.43 per cent from 16.11 per cent within the previous week. The two-year bond yield rose by 142 foundation factors to 17.50 per cent, whereas the seven-year yield elevated by 61 foundation factors to 17.04 per cent.
The 10-year bond yield additionally rose by 46 foundation factors to 17.05 per cent, whereas the 30-year yield declined by 60 foundation factors to 14.60 per cent.
FMDA acknowledged: “FGN bond yields climbed further, up 32bps on average to 16.43 per cent, led by the 2-year (+142bps) and 7-year (+61bps), while the 30-year (-60bps) was the only tenor to rally.”
Treasury invoice yields additionally moved larger, with the typical yield rising by seven foundation factors to 18.23 per cent. The one-month and three-month yields rose by 79 foundation factors and 65 foundation factors to 18.83 per cent and 17.65 per cent, respectively.
However, the six-month yield declined by 101 foundation factors to 17.70 per cent, whereas the 12-month yield fell by 29 foundation factors to 18.38 per cent.
At the October 14 main market public sale, the DMO allotted N269.06 billion towards a decreased provide of N450 billion, down from N900 billion beforehand, rejecting the majority of demand on the 364-day paper.
Stop charges remained at 15.50 per cent for the 91-day invoice and 15.80 per cent for the 182-day invoice, whereas the 364-day price rose by 5 foundation factors to fifteen.90 per cent, its first improve since August.
The report described the event as “a pause in the post-MPR rate-cutting momentum.”
