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T-Bills Yields Rise by 0.25% as CBN Sells One-Year Bills at 14%

By Dipo Olowookere

Selling pressure dominated the treasury bills secondary market on Thursday as news of a higher than expected OMO clearing rate filtered into the market early into the trading session.

Business Post reports that the average T-bills yields increased during the market by 0.25 percent to settle at 13.97 percent.

Specifically, the yields on the one-month paper rose by 0.16 percent, 3-month note jumped by 0.55 percent, 6-month bills appreciated by 0.15 percent, 9-month note grew by 0.23 percent and the 12-month paper added 0.15 percent.

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During the trading session, selloffs were witnessed mostly on the longer tenured bills as the market traded on a significantly bearish note.

The expectations for higher OMO rates were confirmed by the auction result released later in the day as the Central Bank of Nigeria (CBN) sold a total of 275 billion at 0.25 percent higher on the 105 and 182 day bills and 0.50 percent higher on the 329-day bill.

The 105-day bill cleared at 11.25 percent today with a total of N12 million sold of the N50 billion offered, the 182-day bill cleared at 12.75 percent with N45 billion worth of the N100 billion offered sold to investors, while the 329-day paper cleared at 14 percent with N229.52 billion of the N200 billion auctioned sold.

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“We expect the market to close the week on a relatively flat note. Market players should however cherry pick on some attractive bills on the shorter end of the curve,” analysts at Zedcrest Research said.

Meanwhile, in line with expectations, the money Open Buy Back (OBB) and Overnight (OVN) rates dipped below the 20 percent mark, closing today at 13.33 percent and 14.58 percent as system liquidity was slightly bolstered by the net OMO and bond coupon payments by 104 billion.

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System liquidity is consequently estimated at N76 billion positive from a negative position of N28 billion opening the day.

The rates are expected to close the week at these levels as there are no significant outflows expected tomorrow.

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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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