Nigeria's banking system is set to receive N2.448 trillion in liquidity inflows this week, the Financial Markets Dealers Association (FMDA) said, with maturing Open Market Operations bills accounting for the bulk of the money. According to the FMDA's Weekly Market Report, OMO maturities would contribute N2.298 trillion while Treasury bill maturities would add N148.565 billion. The Central Bank of Nigeria and the Debt Management Office are preparing fresh debt auctions to absorb the excess cash from the financial system.
The anticipated inflows come as the CBN continues efforts to manage surplus naira liquidity. The central bank raised N5.667 trillion through OMO auctions on 3 and 6 November, the FMDA said, representing 91.7 per cent of the entire N6.182 trillion raised through OMO during October. System liquidity rose 15.36 per cent week-on-week to N8.505 trillion from N7.373 trillion, according to the report. The DMO, meanwhile, rejected roughly 75.1 per cent of N2.045 trillion in bids at its 4 November auction and allotted just N509.401 billion against an N800 billion offer, continuing to ration Treasury bill allotments.
The DMO is returning to the primary Treasury bill market on 11 November with an N800 billion offer comprising N100 billion in 91-day bills, N100 billion in 182-day bills and N600 billion in 364-day bills, settling on 12 November. This auction will serve as the main scheduled liquidity drain for the week alongside potential further OMO interventions, the FMDA said.
In the foreign exchange market, the naira showed mixed performance. The naira firmed 0.34 per cent at the official window to N1,347.64 per dollar but weakened 1.38 per cent at the parallel market to N1,410.60 per dollar, the FMDA stated. The premium between the two windows widened to N62.96 from roughly N39 the previous week, reversing October's narrowing trend. Nigeria's external reserves declined marginally by 0.16 per cent week-on-week to $55.133 billion.
In the fixed-income market, average FGN bond yields rose by 20 basis points to 16.37 per cent, driven largely by the seven-year instrument which increased by 104 basis points. Treasury bill yields, however, moved in the opposite direction, declining by 35 basis points to 17.67 per cent. Internationally, average Brent crude fell by 13.45 per cent to $99.97 per barrel, retreating from an intraday high above $116 recorded the previous week. The FMDA attributed the oil price decline to easing Middle East supply concerns following signs of de-escalation involving Iran after the United States midterm elections.