By Dipo Olowookere
On Wednesday, the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) conducted the sale of fresh treasury bills via the primary market auction.
During the exercise, a total of N136.31 billion worth T-bills were offered and sold to market players amidst subscriptions worth N213.37 billion received.
Business Post observed that while rates on the 91-day and 182-day bills were retained at the previous levels, the rate for the 364-day bills were raised by 0.45 percent to 13.50 percent from 13.05 percent at the last PMA.
Subscriptions worth N202.34 billion were received from investors for the N126.09 billion worth of the one-year instrument with a total of N129.65 billion finally sold to market players.
Generally yesterday, the treasury bills market was bearish with average yields inching higher by 0.24 percent to close at 13.89 percent.
This was mainly due to continued selloffs by investors on the short end of the curve in anticipation of higher stop rates at the PMA.
Another OMO auction is expected by the CBN today due to a N241 billion OMO maturity and according to analysts at Zedcrest Research, “We consequently expect yields to remain elevated in the secondary market, with market players expected to maintain high bids at the auction in view of clearing rates at Wednesday’s PMA.”
Meanwhile, the average money market rate appreciated yesterday by 1.84 percent to 8.63 percent, following the 2 percent and 1.67 percent rise in both the Open Buy Back (OBB) and the Overnight (OVN) rates respectively.
This came on the back of continued interventions by the CBN to stabilize rates within the I&E FX market.
The interventions by the CBN are expected to continue in order to pressure rates higher towards weekend.
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