The Central Bank of Nigeria (CBN) will auction today 81 billion Treasury invoices (Wednesday), marking a smaller broadcast compared to recent auctions that have seen an increase in investors' interest.
The offer is expected to prove market appetite in the midst of liquidity conditions in the financial system. Analysts suggest that the CBN can monitor an open market operations auction (OMO) to mop excess liquidity, since ₦ 264 billion invoices of omo mature this week. Combined with today's T-Bill offer, the Central Bank could withdraw up to ₦ 345 billion circulation if both auctions are maintained.
Market observers believed that the CBN will maintain their aggressive adjustment posture. Without an OMO refinancing auction, maturation instruments would increase system liquidity, potentially reduce short -term interest rates.
In its last T-Bills auction, the CBN offered ₦ 450 billion in three tenors: ₦ 50 billion (91 days), ₦ 100 billion (182 days) and ₦ 300 billion (364 days). The demand for investors was strong, with total subscriptions that reached ₦ 1.31 billion, which exceeded the supply / supply ratio of 2.3x in the previous round. Stop rates were set at 17.98 percent for 91 days, 18.50 percent for 182 days and 19.35 percent for 364 -day tenors.
In a higher exhibition of policy hardening, the bank maintained an ₦ 600 billion auction last week, attracting ₦ 1,529 billion in offers and assignment ₦ 1,512 billion.
Today's auction will be closely monitored by the signs of the feeling of changing investors and more clues about the trajectory of CBN monetary policy.