Nigeria's overnight rates have been depressed all week with money market liquidity high.
Overnight rates closed at 5.3 percent on Thursday. Investors bought down Treasury bills early in the week in response to liquidity and the lack of OMO auctions held up until Friday. 
However, this trend was reversed on Friday by an OMO auction which withdrew 750 billion naira from the market.
The 30, 90, 180 and 364-day bills opened in the secondary market at 13.32 percent, 14.12 percent, 13.82 percent, and 13.22 percent respectively, and closed at 14.39 percent, 12.51 percent, 13.49 percent, and 13.22 percent.
Investor interest on the 2027 and 2036 bonds pushed those yields lower during the week. 2020, 2021, 2022, 2027, 2036 and 2037 maturity bonds opened in the secondary market at 13.68 percent, 13.89 percent, 13.62 percent, 13.75 percent, 13.64 percent, and 13.54 percent and closed at 13.40 percent, 13.77 percent, 13.50 percent, 13.64 percent, 13.50 percent, and 13.56 percent.
On Thursday, the central bank reduced its stop rate for the longer tenor OMO maturity from 14.40 to 14.30 percent.
The market will be watching to see if this was a one-off event. If the central bank drops the stop rate further, rates will experience downward pressure across the curve. It was another stable trading week on the naira with the trading range remaining between 358 and 360.50.
The CBN governor mentioned at the MPC outcome statement that external reserves have risen to $46.69 billlion, the highest level since May 2013.
Monthly Turnover in the Investors and exporters FX window was $5.11bn, the second highest since the market liberalization policy of April 2017. We expect USD demand to increase this April as a result of dividend payments by corporates. We, however, do not expect pressure on the currency as the supply of USD remains strong.
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