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CBN Maintains 364-Day T-Bills Rate at 13.50%

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Thursday conducted its much-awaited mopping up of excess liquidity in the system via the issuance of treasury bills via Open Market Operations (OMO).

During the exercise, the apex bank offered the debt instrument worth N300 billion to investors, but was able to raise N249 billion from market players.

Business Post reports that the investors mainly went for the half-year and one-year bills offered by the central bank, with the short tenor substantially ignored.

It was gathered that N50 billion worth of the 91-day bills were auctioned by CBN today, but only subscriptions valued at N2.87 billion were received, forcing the apex bank to issue a No Sale result at the end of the exercise.

However, N100 billion worth of the 182-day paper was offered by the CBN on Thursday, with subscriptions worth N31.83 billion received and sold to investors at 12.50 percent.

For the 364-day note, the bank maintained the rate at 13.50 percent after receiving subscriptions worth N217.27 billion from the N150 billion worth of the one-year bill auctioned at the exercise.

But in general, the amount raised by the central bank during today’s OMO was not enough to offset the N277 billion inflows in maturing bills.

During today’s session, there was a slight selloff seen on the shorter end of the curve (Oct – Feb), as market players repositioned for the OMO auction.

The market is expected to close the week on a slightly bearish note, due to expected outflows for a retail FX auction by the CBN on Friday.

Meanwhile, the money market rates were relatively stable today with the Open Buy Back (OBB) and Overnight (OVN) rates closing at 9.00 percent and 9.58 percent respectively.

This was as system liquidity remained supported by inflows from OMO maturities and retail FX refunds.

However, the rates are expected to spike above single digits tomorrow, due to expected outflows for a retail FX auction by the CBN.

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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