CBN Sells N187b T-Bills in One Week as Lending Rate Falls

By Dipo Olowookere

Treasury bills worth N186.92 billion were sold by the Central Bank of Nigeria (CBN) last week via both the primary and secondary markets.

While N33.38 billion worth of the bills were sold off by the apex bank at the primary market, N153.54 billion worth of the instruments were auctioned via Open Market Operations (OMO).

It was observed that stop rates for the auctioned fresh T-bills moved in different directions across the tenor buckets: 91-day stop rate was flattish at 10 percent while 182-day stop rate rose to 10.50 percent from 10.40 percent.

However, the 364-day stop rates fell to 11.22 percent from 11.30 percent.

Also, N153.54 billion worth of T-bills were sold via the secondary market and the outflows were offset by N473.40 billion in matured T-bills on Thursday.

Also, indicative of liquidity surplus was the Standing Deposit Facility (SDF) worth N431.43 billion which outweighed the Standing Lending Facility (SLF) worth N8.67 billion, according to Cowry Asset.

Hence, NIBOR for overnight funds rate moderated to 8.25 percent from 8.90 percent amid sustained financial liquidity ease.

However, NIBOR for other tenor buckets rose: 1 month, 3 months and 6 months tenor buckets rose w-o-w to, 12.06 percent from 11.31 percent, 12.70 percent from 12.44 percent and 14.52 percent from 13.80 percent respectively, suggesting unwillingness of banks to lend to one other.

Elsewhere, NITTY rose for most maturities tracked amid sustained bearish activity due to the continued sell-offs by foreign portfolio investors: yields on the 1 month, 6 months and 12 months maturities increased to 10.34 percent from 10.24 percent, 13.01 percent from 12.77 percent and 12.86 percent from 12.76 percent respectively.

However, yield on 3 months maturity fell to 11.35 percent from 11.36 percent.