Nigerian Money Market sees liquidity boost as OVN rate dips

Nigeria’s overnight (OVN) rate fell by 4 basis points week-on-week to 26.9%, driven by significant inflows from Open Market Operation (OMO) maturities worth NGN1.14 trillion and Federal Government of Nigeria (FGN) bond coupon payments of NGN17.87 billion, according to Cordros Research.

Confiance News reports that these inflows offset debits from the OMO Primary Market Auction (PMA) of NGN655.25 billion and net Nigerian Treasury Bills (NTB) issuance of NGN115.80 billion. As a result, average system liquidity improved, reaching a net long position of NGN646.50 billion, up from NGN230.04 billion the previous week.

Looking ahead, Cordros Research anticipates further liquidity support next week from OMO maturities of NGN987.22 billion and FGN bond coupon payments of NGN5.63 billion, which are expected to offset debits from the FGN bond PMA of NGN300.00 billion, barring any Central Bank of Nigeria (CBN) mop-up actions. “We expect the OVN rate to decline further from current levels,” the firm stated.