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#1: Liquidity Rises As CBN Slows On Mop Up » by Hotsaint » February 26th, 2018, 7:51 am

Liquidity at the money market fared better last week as overnight lending rates trended around single digit with a system liquidity that was in excess of N200 billion on the back of reduced mop up by the Central Bank of Nigeria (CBN) through Open Market Operations (OMO). Compared to the previous week when the CBN mopped up N259.39 through OMO auctions and Treasury Bills, the apex bank had mopped up N147.27 billion through a single OMO auction and Treasury Bills sales held towards the end of last week. Overnight lending rate fell to12.42 per cent, as inflows of N223.99 billion from the Federal Accounts Allocation Committee (FAAC) disbursement and N56.43 billion from maturing OMO bills outweighed outflows via OMO auction. Banks borrowing from the apex bank also dropped as they had more liquidity. Compared to N260.12 billion taken by banks through the Standing Lending Facility (SLF) window the previous week, banks’ borrowing through the window dropped to N248.91 billion last week. The taking of banks through the SLF window has been on a downward trend for two weeks now. Deposits was also on the decline as the amount that came into the CBN through the Standing Deposit Facility (SDF) dropped to N242.05 billion from N258.55 billion which came in from the banks the previous week. Traders say they expect the CBN to increase its liquidity mop up this week as the market looks forward to an inflow of N109.38 billion through maturing OMO bills. Meanwhile, the value of the naira strengthened last week selling at around N362 to the dollar at the parallel market from N363 which it had maintained for weeks in a row. At the Investors’ and Exporters’ window, the value of the naira also gained value as inflow increased. Total turnover in the I&E forex window had increased by 24.44 per cent last week $757.69 million. Traders said the bulk of the trades consummated last week was within the range of N360 to N369 to the dollar. The weakening of the dollar was also due to inflows of forex through interventions of the CBN. At the beginning of the week, the apex bank had injected $210 million into the forex market comprising $100 million, $55 million, and $55 million disbursements to the wholesale, SMEs, and invisibles windows, respectively. It also intervened in the Retail Secondary Market Intervention Sales (SMIS) to the tune of $321.4 million to meet dollar requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors. Total value of open contracts at the FMDQ futures market closed at $3.4 billion, from $3.3 billion the previous week. The APR 2018 with contract price of $360.92 instrument was the most subscribed while the JAN 2019 instrument with contract price of $362.27 remained the least subscribed with total value of $18.5 million. The FEB 2018 instrument will be maturing this week and in line with trend, and traders say they expect the instrument to be replaced with a new contract. Also with external reserves at S$41.8 billion as at February 21, 2018 and the issuance of $2.5 billion Eurobond by the government coupled with the sustained stability global oil prices, traders say they are confident of the CBN’s continued ability to support forex market liquidity and stability.
source : http://www.akelicious.com/2018/02/liqui ... op-up.html
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#2: Liquidity Rises As CBN Slows On Mop Up » by Hotsaint » February 26th, 2018, 7:51 am

Liquidity at the money market fared better last week as overnight lending rates trended around single digit with a system liquidity that was in excess of N200 billion on the back of reduced mop up by the Central Bank of Nigeria (CBN) through Open Market Operations (OMO). Compared to the previous week when the CBN mopped up N259.39 through OMO auctions and Treasury Bills, the apex bank had mopped up N147.27 billion through a single OMO auction and Treasury Bills sales held towards the end of last week. Overnight lending rate fell to12.42 per cent, as inflows of N223.99 billion from the Federal Accounts Allocation Committee (FAAC) disbursement and N56.43 billion from maturing OMO bills outweighed outflows via OMO auction. Banks borrowing from the apex bank also dropped as they had more liquidity. Compared to N260.12 billion taken by banks through the Standing Lending Facility (SLF) window the previous week, banks’ borrowing through the window dropped to N248.91 billion last week. The taking of banks through the SLF window has been on a downward trend for two weeks now. Deposits was also on the decline as the amount that came into the CBN through the Standing Deposit Facility (SDF) dropped to N242.05 billion from N258.55 billion which came in from the banks the previous week. Traders say they expect the CBN to increase its liquidity mop up this week as the market looks forward to an inflow of N109.38 billion through maturing OMO bills. Meanwhile, the value of the naira strengthened last week selling at around N362 to the dollar at the parallel market from N363 which it had maintained for weeks in a row. At the Investors’ and Exporters’ window, the value of the naira also gained value as inflow increased. Total turnover in the I&E forex window had increased by 24.44 per cent last week $757.69 million. Traders said the bulk of the trades consummated last week was within the range of N360 to N369 to the dollar. The weakening of the dollar was also due to inflows of forex through interventions of the CBN. At the beginning of the week, the apex bank had injected $210 million into the forex market comprising $100 million, $55 million, and $55 million disbursements to the wholesale, SMEs, and invisibles windows, respectively. It also intervened in the Retail Secondary Market Intervention Sales (SMIS) to the tune of $321.4 million to meet dollar requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors. Total value of open contracts at the FMDQ futures market closed at $3.4 billion, from $3.3 billion the previous week. The APR 2018 with contract price of $360.92 instrument was the most subscribed while the JAN 2019 instrument with contract price of $362.27 remained the least subscribed with total value of $18.5 million. The FEB 2018 instrument will be maturing this week and in line with trend, and traders say they expect the instrument to be replaced with a new contract. Also with external reserves at S$41.8 billion as at February 21, 2018 and the issuance of $2.5 billion Eurobond by the government coupled with the sustained stability global oil prices, traders say they are confident of the CBN’s continued ability to support forex market liquidity and stability.
source : http://www.akelicious.com/2018/02/liqui ... op-up.html

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