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Cost of Funds to Rise as N164.6b Treasury Bills Mature

By Dipo Olowookere

The interbank rates are expected to trend upwards this week as treasury bills worth N164.58 billion mature via the secondary market.

The maturing bills, according to analysts at Cowry Asset, might not sufficiently sustain liquidity given anticipated primary market auctions for bonds, which will cause the rise in the cost of funds.

Last week, the Central Bank of Nigeria (CBN) auctioned treasury bills worth N136.31 billion via the primary market.

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The stop rate for the 91-day bill auctioned T-bills was flattish at 11 percent; however, the stop rate for 182-day maturity fell to 12.20 percent from 12.30 percent as did the 364-day maturity at 13.47 percent from 13.50 percent.

The apex bank also auctioned N337.60 billion via secondary market and the outflows outstripped inflows worth N376.88 billion in matured T-bills.

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Howbeit, NIBOR fell for all tenor buckets amid sustained financial system liquidity ease (masking Friday’s increase): NIBOR for overnight, 1 month, 3 months and 6 months tenor buckets fell to 4.9 percent from 13.79 percent, 12.05 percent from 14.86 percent, 13.90 percent from 15.23 percent and 14.82 percent from 15.79 percent respectively as did NITTY for all maturities tracked on buy pressure: yields on 1 month, 3 months 6 months and 12 months maturities fell to 10.54 percent from 14.17 percent, 12.74 percent from 14.21 percent, 13.16 percent from 13.89 percent and 14.72 percent from 15.42 percent respectively.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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