“Going forward we expect to see some cushioning in the system which will come from the maturities of OMO. I don’t think we’re going to see much of an interest rate spike going forward but that being said, we still think there will be some kind of pressure in terms of interest rates,” Steve Osho, a global market trader at Stanbic IBTC Bank, told CNBC Africa on Tuesday.
In a week where the Central Bank of Nigeria’s Cash Reserve Ratio debit took full effect, a number of Open Market Operation (OMO) bills, worth 138.91 billion naira, are expected to mature.
Interbank rates have also been poorer as the market adjusts to new liquidity conditions and investors are expectant of the government bond auction on Wednesday, where a three-year and a 20-year bond will be issued.
Despite the volatility, Osho indicated that if you look at the market net figures, it is barely short 50 to 70 billion naira at the moment.
“Before the CRR debit actually hit the system, anticipation was that we’re going to see interest rates spike to highs of 20s, which we saw on Wednesday before the public holidays. Having resumed yesterday and having seen the market statistics, released by CBN, it was saying that 96 billion was debited from the system,” he said.