Interest rates expected to moderate on expected inflow of N294.28 billion
Liquidity pressure in the money market is expected to ease as there will be an open market operation (OMO) of N30.0 billion and treasury bills (NTB) worth of N264.28 billion due this week.
Therefore, “we expect interest rates to moderate over the coming week despite growing appetite for NTB from risk-averse investors,” Cowry Assets Management Limited dealers said. in a note to customers.
The treasury bill market was quiet over the past week as there were no treasury bill maturities or rollovers, which put pressure on liquidity.
Meanwhile, the yield on Nigerian Treasury bills rose from around 3% to 7% in less than two months after the benchmark interest rate was raised by 150 basis points (bps) by the Central Bank of Nigeria (CBN).
This was due to rising inflation, which caused the benchmark interest rate to rise from 11.5% to 13% on May 24, and from 13% to 14% in July 2022.
The development is seen as a good opportunity for investors to reduce negative real returns on their investment.
“It is positive for investors as it lessens the impact of high inflation on their investment and enables them to get more returns,” said Ayodeji Ebo, a finance and economics expert.