24062019 - EDO Oyegun Oshiomhole ateach others troats

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Vanguard Newspaper 24 June 2019

Vanguard, MONDAY, JUNE 17, 2019 —21

FINANCIAL VANGUARD

Decline in stop rates on FGN bond to

persist as DMO offer N100bn

Continues from page 19

market this week.

Last week, cost of

funds rose in response

to outflow for funding

of foreign exchange

wholesale auctions and

foreign exchange

swaps by the Central

Bank of Nigeria as well

as rollover of N17.61

billion worth of treasury

bills (TBs) that

matured during the

week. The outflows

suppressed the impact

of inflow of N89 billion

from matured

secondary market

(Open Market

Operation, OMO) TBs,

prompting average

short term interest rate

to rise by 346 bpts.

Data from FMDQ

showed that interest

rate on Collateralised

(Open Buy Back, OBB)

rose by 342 bpts to 8.71

percent last week from

5.29 percent the

previous week.

Similarly, interest rate

on Overnight lending

rose by 350 bpts to 9.21

percent last week from

5.71 percent the

previous week.

Analysts at Lagos

based Vetiva Capital

Management Company

projected that the apex

bank might sell OMO

bills today leading to

further rise in cost of

funds. "With the current

level of system

liquidity, we foresee an

OMO auction in

Monday's session,

leading to a negative

close in the secondary

market at the start of

the week", they said.

External reserves

record first weekly

decline in three

months

The nation's external

reserves last week

record the first weekly

decline in three

months.

Buoyed by increased

foreign exchange

earnings courtesy high

crude oil price and

influx of dollars from

foreign portfolio

investors, the nation's

reserves have been on

the upward trend since

February 28th, 2019,

when it stood at $41.296

billion. This trend was

however halted on

June 10 when the

reserves peaked at

$45.175 billion.

Last week, the

reserves recorded its

first weekly decline of

$76 million as it fell to

$45.087 billion on

Thursday June 20th,

2019 from $45.163

billion on Thursday

June 13th, previous

week.

Meanwhile the naira

appreciated marginally

by 2 kobo at the

Investors and Exporters

(I&E) window last

week. Data from FMDQ

showed that the

indicative exchange

rate for the window

dropped marginally to

N360.49 per dollar last

week from N360.51 per

dollar the previous

week. On its part, the

CBN sustained its

weekly injection of $210

million to support

activities in the

interbank foreign

exchange market.

Treasury report chart 2: Forex & TB rates

Treasury report chart 4: Yields on FGN Bonds

Treasury report chart 1: Monthly foreign flows and Domestic Transactions

on NSE

Treasury report chart 3: Interbank interest rates

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