Nigerian bonds seen rising on impact of liquidity tightening

CBN ag Gov, alade

Yields on Nigerian bonds are expected inch up slightly toward 14 percent next week as demand for the debt paper falls due to the impact of monetary tightening by the central bank.
The central bank kept interest rates on hold for the 15th time in a row on Tuesday but hiked its cash reserves requirement on private sector deposits by 300 basis points to 15 percent.
Traders said they expected fresh tightening, while the level of liquidity in the market remained strong.
"Yields have dropped in the wake of expectations that central bank would embark on aggressive liquidity mopping-up after its monetary policy committee announced a fresh tightening, but this has not been so," one dealer said.
Dealers said yields have fell to an average of 13.95 across the board, halting fresh sell off by offshore investors.
With expected resumption of aggressive liquidity mop-up next week, yields are seen climbing to around 14 percent on the long-tenor debt notes, traders said.