By Babajide Komolafe
The Central Bank of Nigeria (CBN) drastically reduced its liquidity mop up activities through treasury bills by 81 percent, year-on-year, y/y, to N793 billion in the first quarter of the year (Q1’21).
The apex bank, among other things, controls money supply (liquidity) in the economy by issuing or purchasing secondary market treasury bills, also known as Open Market Operations (OMO) when it wants to reduce money supply, while it injects liquidity by purchasing OMO treasury bills.
Financial Vanguard analysis of OMO auctions conducted in Q1’21 shows a sharp decline in the amounts of bills issued and sold by the CBN compared to the same period of last year (Q1’2020).
0% return! Debt mutual fund investors in for a shock in FY22 Investors at the short-end (up to 2Y) will probably earn zero or negative real return (inflation-adjusted) in FY22, similar to FY21, says Dhawal Dalal, CIO-Fixed Income Edelweiss AMC
Mutual fund managers have been cautioning investors to lower return expectation from debt mutual funds this year. They believe, investors should expect low single-digit return from the bond market in FY22. Investors at the short-end (up to 2Y) will probably earn zero or negative real return (inflation-adjusted) in FY22, similar to FY21, says Dhawal Dalal, CIO-Fixed Income Edelweiss AMC. Investors will have to increase their average maturity in order to optimise their risk-adjusted returns, he adds.
0% return! Debt mutual fund investors in for a shock in FY22 businesstoday.in - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from businesstoday.in Daily Mail and Mail on Sunday newspapers.
Smart RBI created scope within the limited space to keep pushing growth
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Last Updated: Apr 08, 2021, 06:09 PM IST
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Synopsis
Under the newly-announced program, RBI will commit upfront to a specific amount of open market purchases of government securities.
Economist, Geojit Financial Services
She holds a Masters in Economics and is currently pursuing her doctoral studies. Before joining Geojit, she was working as Senior Research Associate at the Kochi, Kerala-based think-tank Centre for Public Policy Research. Ms Mathew writes regularly on the developments in the areas of monetary policy, fiscal policy, international trade and Union/State budgets.
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