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CBN Borrows N343b to Mop up N375b Inflows From Maturing Bills

By Dipo Olowookere

The sum of N343 billion was raised from the local debt market on Thursday by the Central Bank of Nigeria (CBN) to mop up most of the N375 billion worth of treasury bills that matured today.

The apex bank sold the debt instrument to investors, who subscribed to the exercise, though most interests were seen in the long-dated tenors.

Business Post reports that of the N50 billion worth of the 91-day bills offered, the apex bank sold N1.19 billion at 11.90 percent, of the N100 billion worth of the 189-day paper, it raised N12.68 billion at 13.50 percent, and of the N250 billion worth of the 364-day note, it sold N329.32 billion at 15.00 percent.

At the close of transactions at the secondary market for T-bills, yields trended higher to close at 15.47 percent.

The one-month yield rose by 0.05 percent to finish at 15.23 percent, the 6-month paper appreciated by 0.18 percent to end at 14.64 percent, the 9-month note went up by 0.12 percent to close ar 16.74 percent, while the 12-month bill increased by 0.01 percent to finish at 17.30 percent.

However, the 3-month paper suffered a 0.03 percent loss to settle at 13.46 percent.

According to analysts at Zedcrest Research, “We expect yields to remain elevated as the current tight system liquidity levels are expected to constrain buying interests in the market, whilst a further OMO auction would cause yields to trend higher.”

At the money market today, the average rate declined marginally by 3 percent, with the Open Buy Back (OBB) and Overnight (OVN) rates closing the day at 22.67 percent and 24.67 percent.

This was as the N375 billion inflows from OMO T-bills maturities were mopped up by a N343 billion OMO sale by the CBN.

System liquidity consequently improved marginally to N66 billion negative and the rates are expected to remain elevated as system liquidity remains in negative territory, with the possibility for a further OMO sale 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. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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